Does a Promissory Note Have to be Notarized
A promissory note only needs the signatures of the parties involved in the agreement, not necessitating acknowledgment by a notary public to be legitimate.3 min read
2. Elements Required For an Enforceable Contract
3. The Notary Public's Role in Signing a Promissory Note
Does a promissory note have to be notarized? A valid promissory note only needs the signatures of the participating parties involved in the agreement, not necessitating acknowledgment or being witnessed by a notary public to be legitimate. Promissory notes are legal documents and legally enforceable because they include the terms and conditions by which money is to be compensated from one party to another.
It is mandatory to have all individuals involved sign the note because it states absolute stipulations to pay certain amounts of money, under certain terms and conditions. To avoid future disagreements about the licitness of promissory notes, businesses may opt to have the promissory notes witnessed and confirmed by notary publics even if some state laws don't demand it.
Some Facts About Promissory Notes
If you have borrowed money from someone and promised to pay them back, then you have taken part in the creation of a promissory note, even if it wasn't initially in writing. Because it is a contract, it is important to get the promissory note in writing when it's established so it is valid and enforceable. If the promise of payment isn't in writing, it is difficult to prove the terms and conditions of the promise as they were agreed upon in a court of law. It would be unenforceable if the compensating party reneges on the promise to pay.
Other facts regarding promissory notes include:
- They are legal documents which specify the terms and conditions for monetary compensation because an agreement was entered into.
- They can be utilized to acquire or increase capital, goods, and credit by businesses.
- They need the signatures of all people involved, which include those who are representing themselves or their companies, with the promise to honor their debt if they are the compensating party.
- If a party borrows money from another party or lender, the borrower must sign a contract before the borrower can have the funds released to him, so the agreement is legally binding.
Elements Required For an Enforceable Contract
For a written agreement or contract to be enforceable, it must contain specific elements called material terms.
- The Parties: A description is mandatory of all the parties involved in the agreement. The parties must be easily perceived according to the description.
- The Promise: The exact statement of what is being agreed upon needs to be specific, to provide clarification. For a promissory note to be explicit, it needs to include the promise to pay a sum of money, the clarified terms or conditions on repayment, and an absolute date for payment.
- Amount Payable: Also called the “sum certain” which is the amount that's compensated to the lender. If the amount also includes interest, calculate the added interest that will be accrued over the time span the agreement is to cover and include it in the amount payable.
- Signatures: It's required that all the parties involved have to sign the agreement. If you choose to have witnesses or a notary public present, also include their signatures as well, although it isn't necessary.
The Notary Public's Role in Signing a Promissory Note
In most cases, there isn't a need for a promissory note to be notarized. Contingent on the kind of promissory note that it is and the controlling legal jurisdiction where you have become associated with, you might need to have a notary republic or some witnesses present during the signing of the note, adding their signatures with the parties involved. If it's not mandatory, having an objective third party, like a notary public, witness the signing of the promissory note will serve as incontestable corroboration when it's necessary to enforce the terms and conditions of the note in a court of law if the other party fails to honor their promise.
If you have further questions about promissory notes and whether they need to be witnessed by a notary public to be legally enforceable according to the laws of your state, contact UpCounsel.com. Post your legal need on UpCounsel's marketplace, and there will be a lawyer to assist you in your situation.
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