A promissory note is a written promise to pay a debt. An unconditional promise to pay on demand or at a fixed or determined future time a particular sum of money to or to the order of a specified person or to the bearer.
Title: West Virginia Checklist — Items to Consider for Drafting a Promissory Note Introduction: Drafting a promissory note in West Virginia requires careful attention to various legal aspects to ensure its enforceability and protection of both parties involved. This checklist highlights essential items to consider when drafting a promissory note in West Virginia, providing a comprehensive guide for successful and legally sound agreements. 1. Parties Involved: Identify the lender (payee) and borrower (maker) with accurate names, addresses, and contact information. Ensure the parties are of legal age and fully competent to enter into a binding contract. 2. Principal Amount and Interest: Specify the principal loan amount, the interest rate (if any), and the exact method of calculating and compounding interest. Ensure adherence to West Virginia laws governing usury and interest rates. 3. Payment Terms: Clearly state the repayment terms, including the due date, frequency (monthly, quarterly, etc.), and mode of payment (check, cash, electronic transfer). Specify whether any grace period will be granted. 4. Late Payment Penalties: Define the consequences for late payments, such as late fees, additional interest, or other penalties. Ensure compliance with West Virginia's laws on charging late fees and penalties. 5. Security or Collateral: If applicable, outline any pledged collateral, its description, and the terms regarding its release upon complete repayment. Accompanying security agreements, liens, or guarantees should be properly referenced. 6. Prepayment: Outline whether prepayment of the loan is allowed and if any prepayment penalties or fees apply. Follow West Virginia law's guidelines related to prepayment restrictions. 7. Governing Law and Venue: Determine that the promissory note will be governed by West Virginia law. Specify the jurisdiction or venue where any disputes will be resolved, such as state or federal courts within the specific county. 8. Default and Remedies: Clearly state the consequences if the borrower defaults on the note, such as acceleration of the debt, seizure of collateral, or initiation of legal actions. Be mindful of West Virginia's laws regarding collections, foreclosure, and any required notice periods. 9. Waivers and Amendments: Include provisions addressing whether waivers, modifications, or amendments to the promissory note should be in writing and signed by both parties to be enforceable. 10. Attorney's Fees and Costs: Consider adding a clause that allows the prevailing party in any litigation to recover reasonable attorney's fees and other associated costs. Types of West Virginia Checklists: 1. Personal Promissory Note: Used by individuals lending money to family members, friends, or other acquaintances. This checklist caters to personal loan agreements, covering the above items with a focus on non-commercial transactions. 2. Commercial Promissory Note: Caters to business-related loans, covering specific considerations related to commercial lending within West Virginia. Typically, includes more complex terms, such as cross-default provisions, guarantor requirements, and business-specific clauses. Remember to consult with a qualified attorney to ensure compliance with West Virginia's laws and regulations when drafting a promissory note. Each situation may have unique factors that should be considered for a comprehensive and enforceable agreement.
