Note agreements are often issued by business entities and corporations out of the financial management contract they have entered into with the borrowing companies or individuals. These notes, more often than not, contain some provisions related to loan payment or indemnification (as may be provided by the third party under the indemnity agreement).
Note agreements, like non-disclosure agreement, do contain some essential elements necessary and befitting for a legal contract as such. For more sample templates of note agreement, you may continue scrolling down the page to view note purchase agreement, subordinated promissory note, purchase agreement, among others.
Convertible Promissory Note Purchase Agreement
Subordinated Promissory Note
What Is a Note Agreement?
As defined, a note agreement is a contract involving privately placed debt by a borrower or a debtor from a lending company, individual, an agency and the like. There are a number of pre-requisites to be considered in creating a note agreement, and some are provided below:
- A note agreement, just like any other agreement templates, must be entered into by two or more legally capable business entities or individuals in good faith.
- A note agreement must specify important personal details of both parties. These details take integral part in the discernment of each party should there be a litigation that may arise out of the agreement.
- A note agreement must be clear as far as the actual loan is concerned. The calculation of its interest, its structured payment, as well as its payment terms must be accurately written.
Difference Between a Promissory Note and a Loan Agreement?
A promissory note and a loan agreement are two different things, and their differences are provided in the discussion below:
- Through a promissory note a borrower explains his inability to pay his current due, stating his willingness to pay the amount in a certain time and manner. A loan agreement, on the other hand, contains the same provisions, but is written as a contract thus making it more legal and formal.
- A promissory note may provide that the borrower can pay his loan to a third party other than the lender himself. In a loan agreement. However, it is prohibited unless otherwise stated.
- Unlike a loan agreement, a promissory note can be written as a negotiable instrument and the lender can transfer the note to his appointee. For more ideas, you may check basic agreement templates.
Promissory Note and Security
Notice of Cancellation of Property Management Agreement
Guidelines and Tips on Note Agreement?
As essential as any other agreement templates in word, a note agreement must be created based on what is standard and acceptable to the business world and the common public as well.
In order to make an effective note agreement, several notable points are provided below:
- Regardless of the purpose and application, a note agreement must conform and be formatted like any other business documents so long as it is professional-like or legally formal.
- A note agreement must contain all the specific details necessary and as required by proper authorities in order to make it legal and compelling.
- The document must be approved and acknowledged by both parties. All clauses contained must have undergone a series of discussions as set forth to ensure their validity.
- Moreover, the document must be duly authenticated and registered by proper authorities so that either party who feels prejudiced can go and seek for some indemnification.
In addition to this, it is also advised that both parties must consult a lawyer who is an expert on contract laws and negotiable instruments to reserve each other’s right.