Promissory Notes

Written by Kathleen Gagne
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One of the most important tasks involved with setting up and managing a small business is obtaining access to sound legal documents such as promissory notes. If you plan to sell a product that costs several hundred dollars or more, you will need to have your customers sign promissory notes that are legally valid in your state. You have several choices when it comes to obtaining these documents.

Promissory Notes with a Designated Payable Date

There are two kinds of promissory notes, those that detail an amount that is due and payable on a specific, predetermined date and those that are payable on demand. The former can be used if you are offering, for example, "90 days same as cash" deals, and they can delineate interest as well as the terms under which the note can become due and payable, such as if the purchaser defaults.

Generally, these documents also contain a series of disclaimers that protect the seller and that allow the seller significant latitude in the kinds of actions he or she takes to collect on the note as agreed. As the small business owner, you have the option of purchasing a standard document template to which you would add your logo or letterhead, or you can have such a document drawn up by an attorney. The latter will likely cost you significantly more than using a standard document.

Notes Online

If you elect to purchase a packet of promissory note types online, you should be very careful to ascertain in advance whether the template is legally valid in your state. You might also want to include other forms of customer agreements and may be able to purchase some of these templates in packages or sets as well. Once you purchase forms templates online or elsewhere, you should not make any changes to those forms since your changes might void the validity of the forms.


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