Promissory Note And Deed Of Trust for Nigeria

Promissory Note And Deed Of Trust Template for Nigeria

A Promissory Note and Deed of Trust is a hybrid financial and security instrument governed by Nigerian law that combines a promise to pay a specific sum with a trust arrangement securing that promise. The document establishes a legally binding obligation for the maker to pay a specified amount to the payee, while simultaneously creating a trust relationship where designated assets are held as security for the debt. The document must comply with Nigerian financial regulations, particularly the Bills of Exchange Act and Trustee Investment Act, and requires proper registration and stamping under Nigerian law to be enforceable. It includes detailed payment terms, trustee obligations, enforcement mechanisms, and specific provisions for handling the secured assets.

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What is a Promissory Note And Deed Of Trust?

The Promissory Note and Deed of Trust is a sophisticated legal instrument commonly used in Nigerian business and financial transactions where secured debt obligations are required. This document type serves dual purposes: it creates a formal acknowledgment of debt through the promissory note component while establishing a security arrangement through the deed of trust. It is particularly useful in situations where lenders require additional security beyond a simple promise to pay, such as in real estate financing, business loans, or large commercial transactions. The document must comply with Nigerian financial and property laws, including the Bills of Exchange Act, Trustee Investment Act, and Stamp Duties Act. It typically includes comprehensive details about payment terms, security arrangements, trustee powers, default provisions, and enforcement mechanisms. The trust component provides additional security for the payee while offering a structured framework for managing and potentially enforcing the security interest.

What sections should be included in a Promissory Note And Deed Of Trust?

1. Parties: Identification of the Maker (debtor), Payee (creditor), and Trustee

2. Background/Recitals: Context of the debt obligation and purpose of the trust arrangement

3. Definitions and Interpretation: Key terms used throughout the document, including financial and legal terminology

4. Promise to Pay: Core promissory note provisions including principal amount, interest rate, and payment terms

5. Security Creation: Establishment of the trust and declaration of assets held in trust

6. Trustee Powers and Duties: Detailed responsibilities and authority of the trustee

7. Events of Default: Circumstances constituting default and consequences

8. Enforcement Rights: Rights and remedies of the payee and trustee upon default

9. Representations and Warranties: Standard declarations about legal capacity and authority

10. Governing Law and Jurisdiction: Specification of Nigerian law and relevant jurisdiction

11. Execution: Signature blocks and attestation requirements

What sections are optional to include in a Promissory Note And Deed Of Trust?

1. Security Interest Registration: Required when the trust involves assets requiring registration under Nigerian law

2. Insurance Requirements: Needed when secured assets must maintain specific insurance coverage

3. Assignment Provisions: Include when the note needs to be transferable

4. Acceleration Clause: Optional provision allowing full amount to become due upon specific triggers

5. Prepayment Terms: Include if early payment is allowed and any associated penalties

6. Trustee Compensation: Required if trustee is to receive specific compensation for services

7. Co-trustee Provisions: Include when multiple trustees are appointed

8. Security Release Mechanisms: Include when specific conditions for releasing security need to be detailed

What schedules should be included in a Promissory Note And Deed Of Trust?

1. Payment Schedule: Detailed breakdown of payment amounts, dates, and interest calculations

2. Property Description: Detailed description of assets held in trust, including legal descriptions and registrations

3. Security Documents: List and copies of additional security documents referenced in the main agreement

4. Trustee Fee Schedule: If applicable, detailed breakdown of trustee compensation and expense reimbursement

5. Form of Notice: Standard forms for various notices required under the agreement

6. Required Insurance: Specific insurance requirements for secured assets

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

Nigeria

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking and Financial Services

Real Estate

Construction

Manufacturing

Agriculture

Oil and Gas

General Commerce

Infrastructure Development

Telecommunications

Mining

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit Administration

Corporate Secretariat

Asset Management

Property Administration

Security Administration

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Secretary

Trust Officer

Credit Manager

Risk Manager

Commercial Director

Treasury Manager

Compliance Officer

Security Trustee

Financial Controller

Banking Relationship Manager

Property Manager

Asset Manager

Industries
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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