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Unsecured Demand Promissory Note for the United Kingdom

Unsecured Demand Promissory Note Template for England and Wales

An Unsecured Demand Promissory Note is a legal document governed by English and Welsh law that contains an unconditional written promise to pay a specified sum of money to a named party, either on demand or at a specified future date. Unlike secured notes, this document does not include collateral as security for the debt. The document is governed primarily by the Bills of Exchange Act 1882 and creates a legally binding obligation that can be enforced in courts of England and Wales.

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Unsecured Demand Promissory Note

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What is a Unsecured Demand Promissory Note?

An Unsecured Demand Promissory Note is commonly used in business and personal lending situations where formal documentation of a debt is required but collateral is not necessary or desired. The document creates a clear record of the debt and its terms, including the amount owed, any applicable interest, and the fact that payment can be demanded at any time. Under English and Welsh law, these notes are particularly useful for short-term lending arrangements or situations where there is a high degree of trust between the parties. The document must comply with the Bills of Exchange Act 1882 and includes specific elements such as an unconditional promise to pay, a definite sum, and the signatures of the involved parties.

What sections should be included in a Unsecured Demand Promissory Note?

1. Date: Date of execution of the promissory note

2. Parties: Clear identification of maker (promisor) and payee (promisee)

3. Promise to Pay: Unconditional promise to pay a specific sum with clear payment terms

4. Payment Amount: Principal amount stated in both numbers and words to avoid ambiguity

5. Interest Rate: Specification of applicable interest rate and calculation method

6. Payment Terms: Clear statement that payment is to be made on demand

7. Governing Law: Specification that the note is governed by laws of England and Wales

What sections are optional to include in a Unsecured Demand Promissory Note?

1. Default Provisions: Additional terms specifying consequences of non-payment and enforcement rights

2. Prepayment Rights: Terms allowing early payment of the note, including any conditions or penalties

3. Assignment Clause: Terms governing the transferability of the note to other parties

4. Waiver of Presentment: Clause waiving formal presentment requirements, useful for simplified enforcement

5. Representations and Warranties: Additional promises by the maker regarding their capacity and authority

What schedules should be included in a Unsecured Demand Promissory Note?

1. Payment Schedule: Optional schedule detailing any installment payments if applicable

2. Interest Calculation Schedule: Detailed methodology for interest calculation if complex arrangements apply

3. Notice Details: Contact information and addresses for formal notices between parties

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 | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions












Clauses















Industries

Bills of Exchange Act 1882: Fundamental legislation governing promissory notes in England and Wales. Section 83 defines promissory notes, and Section 89 covers requirements for presentment.

Law of Property Act 1925: Provides legal framework for understanding the nature of unsecured obligations in England and Wales.

Limitation Act 1980: Sets statutory time limits for bringing claims, typically 6 years for simple contracts and promissory notes.

Consumer Credit Act 1974: Relevant when the promissory note involves a consumer rather than a business-to-business transaction.

Financial Services and Markets Act 2000: Applicable if the note could be classified as a security or financial instrument.

Contract Law Principles: Common law fundamentals including offer and acceptance, consideration, intention to create legal relations, and capacity to contract.

Demand Note Case Law: Relevant judicial precedents regarding the enforceability of demand notes in English courts.

FCA Regulations: Financial Conduct Authority regulations that may apply depending on the parties and circumstances of the promissory note.

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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