Contracts Essay

348 WordsMay 21, 20152 Pages
Homework Assignment Week 5 David D. Jones Everest University Business Law-1 Dr. Tony Wolusky May 18, 2015 After reviewing the information provided, it can be determined the type of document being referenced is known as a promissory note. A promissory note is defined as, “A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.”(investopedia -2014). The promissory note in question does not meet the standards as established by the Uniform Commecial Code (UCC) for several reasons. First, the promissory note does not list any individual’s name that would identify the borrower. Second, it also does not specify a date as to when the note must be paid in full. Next, the promissory note was not signed by the person who issued it and therefore no legal ties can be established binding the borrower to the agreement with the document’s originator. Lastly, the promissory note makes no mention as to the type of loan being requested that would precipitate such a document being drawn up or created. In order for a promissory note to be binding between two parties, it should contain as a minimum such detailed information as follows, “Note, On this date of [DATE], in return for valuable consideration received, the undersigned borrower[s] jointly and severally promise to pay to [LENDER'S NAME], the "Lender", the sum of $[DOLLARS] Dollars, together with interest thereon at the rate of [RATE] percent ([RATE]%) per annum.” (Arron-Larson- 2011) The borrow and lender must also sign and date the notice. I believe that if the parties involved had followed the simple aforementioned steps, the process of executing a legally enforceable promissory note would have been more realistic in this situation. Reference:

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