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Installment Promissory Note Template for United Arab Emirates

A legally binding financial instrument governed by UAE law, specifically the UAE Commercial Transactions Law (Federal Law No. 18 of 1993), where one party (the maker) makes a written promise to pay a specified sum of money to another party (the payee) through predetermined installments. The document includes detailed payment schedules, interest provisions (where applicable under UAE law), and may incorporate security arrangements. It must comply with UAE Central Bank regulations and local commercial practices, while potentially considering Islamic finance principles where relevant.

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What is a Installment Promissory Note?

The Installment Promissory Note is a crucial financial instrument in UAE business operations, commonly used when structured payment arrangements are needed for commercial or personal transactions. It serves as both a debt acknowledgment and a payment commitment document, structured in compliance with UAE Federal Law No. 18 of 1993 and related regulations. This document type is particularly valuable in situations requiring documented proof of debt with specified payment schedules, such as business financing, equipment purchases, or property transactions. The note must contain specific elements required by UAE law, including clear payment terms, parties' information, and proper execution formalities. It can be used in both conventional and Islamic banking contexts, provided it adheres to relevant Sharia principles where applicable.

What sections should be included in a Installment Promissory Note?

1. Promissory Note Declaration: Clear statement that this is a promissory note (must include the term 'promissory note' in the text of the instrument as per UAE law)

2. Maker Information: Full legal name and details of the person/entity making the promise to pay

3. Payee Information: Full legal name and details of the person/entity to whom payment is promised

4. Principal Amount: The total amount promised to be paid, expressed in both numbers and words

5. Payment Schedule: Detailed breakdown of installment amounts and their respective due dates

6. Interest Rate: If applicable, the agreed interest rate in compliance with UAE law

7. Place of Payment: Specific location where payments are to be made

8. Date and Place of Issuance: When and where the promissory note is executed

9. Governing Law: Explicit statement that UAE law governs the promissory note

What sections are optional to include in a Installment Promissory Note?

1. Acceleration Clause: Include when wanting the right to demand full payment if any installment is missed

2. Security Provisions: Include when the note is secured by collateral or guarantees

3. Late Payment Penalties: Include when specific penalties for late payments are agreed upon

4. Prepayment Terms: Include when early payment options are to be specified

5. Assignment Rights: Include when transfer rights need to be specifically addressed

6. Notice Provisions: Include when specific notice requirements for default or other circumstances need to be detailed

What schedules should be included in a Installment Promissory Note?

1. Payment Schedule: Detailed table showing all installment amounts and due dates

2. Security Details: If applicable, details of any collateral or security provided

3. Guarantee Agreement: If applicable, terms of any guarantee securing the note

4. Calculation Schedule: If applicable, breakdown of interest calculations and total payment amounts

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Document Type

Promissory Note

Sector

Banking

Cost

Free to use

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