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how does one write a formal IOU?

If I remember correctly from Bus Law, a promissory note should contain:

Date
A promise to pay or make whole
Time on or before the promise is to be completed
Signature from who is promising
name of who the promise is made out to
the consideration (or what is being promised)


hmmm, I think I'm forgetting something....
 
Originally posted by: CPA
If I remember correctly from Bus Law, a promissory note should contain:

Date
A promise to pay or make whole
Time on or before the promise is to be completed
Signature from who is promising
name of who the promise is made out to
the consideration (or what is being promised)


hmmm, I think I'm forgetting something....
Click to expand...

You forgot that it should be written on a bar napkin.
 
as many hereby, aforementioned, such, and disclaimer of warranty clauses as you can fit on a sheet of paper
 
Originally posted by: The_good_guy
Originally posted by: VictorLazlo
You can get official looking forms at OfficeMax. Just fill in the blanks, and get it notarized.
Click to expand...

too much work.. im dealing with a local ATOT member.. thats all.
Click to expand...

I seriously doubt that a cocktail napkin with "I.O.U: $500. Signed, T.G.G." will hold up in small claims court.
 
Originally posted by: VictorLazlo
Originally posted by: The_good_guy
Originally posted by: VictorLazlo
You can get official looking forms at OfficeMax. Just fill in the blanks, and get it notarized.
Click to expand...

too much work.. im dealing with a local ATOT member.. thats all.
Click to expand...

I seriously doubt that a cocktail napkin with "I.O.U: $500. Signed, T.G.G." will hold up in small claims court.
Click to expand...

You'd be wrong then VictorLazlo. The Supreme Court of Virginia disagreed with you in Lucy v. Zehmer. It's a hilarious case. 2 drunk guys make a K for land on a napkin, one guy thinks its a joke, the other guy doesn't know, K is enforced since it was reasonable for the duped guy to assume a K was made.


As for the original post, there is no one way to make a promissory note, ask 100 lawyers and you'll get 100 promissory notes. General Checklist:


  1. negotiable or nonnegotiable
    Principal amount
    Interest rate
    Payment terms
    Equal payments of principal and interest OR Interest only
    Scheduled payments?
    Payment on demand?
    Maturity date
    Prepayment
    Place of payment
    method of payment
    Events of default and remedies
    Security [if you're smart you'll get a lien on something to make you a secured creditor]

And of course include both signatures, a labeled background paragraph that states your intentions and who the parties are, include your addresses on it, define any terms you want to in a definitions section, and you must have consideration (what binds both parties)
 
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