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Promissory Note Cosigner Agreement for Malaysia

Promissory Note Cosigner Agreement Template for Malaysia

This document is a legally binding agreement under Malaysian law that establishes the terms and conditions under which a cosigner guarantees the repayment of a promissory note if the primary borrower defaults. It outlines the cosigner's obligations, rights, and responsibilities, including their joint and several liability with the primary borrower. The agreement incorporates specific requirements under Malaysian legislation, including the Contracts Act 1950 and Bills of Exchange Act 1949, and includes provisions for notice of default, waiver of defenses, and enforcement mechanisms.

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Promissory Note Cosigner Agreement

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What is a Promissory Note Cosigner Agreement?

The Promissory Note Cosigner Agreement is essential in Malaysian lending practices where additional security is required for a loan or credit facility. This document is typically used when a primary borrower's creditworthiness alone is insufficient to secure a loan, requiring a cosigner to provide additional assurance of repayment. The agreement must comply with Malaysian financial and contract law, including the Contracts Act 1950 and Bills of Exchange Act 1949. It details the cosigner's obligations to repay the debt if the primary borrower defaults, the extent of their liability, and the circumstances under which the cosigner's obligation becomes active. The document includes specific provisions required under Malaysian law regarding notice requirements, enforcement procedures, and the rights and obligations of all parties involved.

What sections should be included in a Promissory Note Cosigner Agreement?

1. Parties: Identifies and defines the Lender, Primary Borrower, and Cosigner with their full legal names and addresses

2. Background: Explains the context of the primary promissory note and the requirement for a cosigner

3. Definitions: Defines key terms used throughout the agreement including 'Primary Note', 'Payment Default', and 'Obligations'

4. Cosigner's Agreement to Pay: States the cosigner's unconditional promise to pay the debt if the primary borrower defaults

5. Nature of Cosigner's Liability: Establishes that the cosigner's liability is joint and several with the primary borrower

6. Waiver of Defenses: Cosigner's waiver of common defenses and right to require the lender to pursue the primary borrower first

7. Cosigner's Representations and Warranties: Cosigner's confirmations regarding their legal capacity and understanding of obligations

8. Notice of Default: Requirements for notifying the cosigner of any default by the primary borrower

9. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and establishes jurisdiction for disputes

10. Execution: Signature blocks for all parties and witnessing requirements

What sections are optional to include in a Promissory Note Cosigner Agreement?

1. Multiple Cosigners: Required when there is more than one cosigner, defining their relationship and respective obligations

2. Early Payment Provisions: Optional section detailing terms for early repayment and any associated penalties or benefits

3. Communication Methods: Optional section specifying preferred methods of communication and notice requirements

4. Cosigner's Right to Information: Optional section detailing what information about the loan the cosigner is entitled to receive

5. Assignment: Optional section addressing whether the agreement can be assigned to other parties

6. Severability: Optional clause addressing the enforceability of remaining provisions if some are found invalid

What schedules should be included in a Promissory Note Cosigner Agreement?

1. Schedule A - Primary Promissory Note: Copy or key terms of the primary promissory note being guaranteed

2. Schedule B - Payment Schedule: Detailed schedule of payment amounts and due dates from the primary promissory note

3. Schedule C - Notice Details: Contact information and preferred methods of communication for all parties

4. Appendix 1 - Form of Default Notice: Template for the notice to be sent to the cosigner in case of default by the primary borrower

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

Malaysia

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
























Clauses




















Relevant Industries

Banking

Financial Services

Private Lending

Microfinance

Small Business Finance

Consumer Finance

Corporate Finance

Real Estate Finance

Relevant Teams

Legal

Finance

Credit Risk

Compliance

Collections

Corporate Secretariat

Documentation

Loan Operations

Relevant Roles

Credit Manager

Loan Officer

Legal Counsel

Compliance Officer

Risk Manager

Financial Advisor

Banking Officer

Collections Manager

Contract Administrator

Corporate Secretary

Finance Director

Credit Risk Analyst

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, 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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