Short Form Promissory Note for the United Kingdom

Short Form Promissory Note Template for England and Wales

A Promissory Note is a written, signed, and legally binding document in which one party (the maker) promises to pay a specific sum of money to another party (the payee) under specific terms. Under English and Welsh law, it serves as a formal acknowledgment of debt and commitment to repay, governed primarily by the Bills of Exchange Act 1882. The document includes essential details such as payment amount, timeline, parties involved, and any applicable interest rates.

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What is a Short Form Promissory Note?

A Short Form Promissory Note is commonly used in England and Wales when there is a need to formalize a debt obligation in a straightforward, legally binding manner. This document is particularly useful for relatively uncomplicated loan arrangements where parties want to avoid the complexity of a full loan agreement while maintaining legal enforceability. The note typically includes essential information such as the principal amount, payment terms, parties' details, and any applicable interest rates. It is governed by the Bills of Exchange Act 1882 and related English common law principles.

What sections should be included in a Short Form Promissory Note?

1. Promise to Pay Statement: Unconditional promise to pay a specific sum

2. Payment Amount: Clear statement of principal sum in numbers and words

3. Payment Date: Specific date or timeline for payment

4. Maker Details: Full legal name and address of person making promise

5. Payee Details: Full legal name and address of person receiving payment

6. Date of Execution: Date note is signed and executed

What sections are optional to include in a Short Form Promissory Note?

1. Interest Rate Terms: Details of interest rate, calculation method and payment frequency when note bears interest

2. Security Provisions: Description of any collateral or security arrangements when note is secured

3. Prepayment Terms: Conditions and procedures for early repayment when early repayment is permitted

4. Default Provisions: Consequences and remedies in case of default on payment

What schedules should be included in a Short Form Promissory Note?

1. Payment Schedule: Detailed schedule of installment payments including dates and amounts

2. Security Description Schedule: Detailed description and documentation of security or collateral provided

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Industries

Bills of Exchange Act 1882: Primary legislation governing negotiable instruments including promissory notes. Defines requirements for valid promissory notes under Section 83 and sets out mandatory form and content requirements.

Law of Property (Miscellaneous Provisions) Act 1989: Relevant legislation when considering security interests if the promissory note is to be secured against any property.

Limitation Act 1980: Establishes the statutory limitation period of 6 years for enforcing simple contracts, including promissory notes.

Contract Law Fundamentals: Common law principles covering offer, acceptance, consideration, intention to create legal relations, and capacity to contract.

Doctrine of Negotiability: Common law principle governing the transferability of negotiable instruments and the rights of subsequent holders.

Financial Services and Markets Act 2000: Regulatory framework relevant if the promissory note could be classified as a regulated financial instrument.

Consumer Credit Act 1974: Regulatory requirements applicable if the promissory note involves a consumer borrower rather than a business.

Money Laundering Regulations 2017: Compliance requirements for anti-money laundering measures when dealing with financial instruments.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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