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Simple Note Payable Agreement for India

Simple Note Payable Agreement Template for India

A Simple Note Payable Agreement is a legally binding financial instrument used in India that documents a promise to pay a specific sum of money under defined terms and conditions. The document, governed by Indian law (particularly the Negotiable Instruments Act, 1881 and Indian Contract Act, 1872), establishes the principal amount, interest rate, payment schedule, and consequences of default. It creates a straightforward debt obligation where one party (the borrower) promises to pay a specified sum to another party (the lender), either on demand or at a predetermined future date, with all terms clearly documented and enforceable under Indian jurisdiction.

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What is a Simple Note Payable Agreement?

The Simple Note Payable Agreement serves as a fundamental financial instrument in Indian business and personal transactions, providing a legally enforceable document that evidences a debt obligation. This document type is commonly used when one party needs to formalize a promise to pay another party a specific sum of money, whether for business loans, personal loans, or other financial arrangements. The agreement must comply with Indian legal requirements, particularly the Negotiable Instruments Act, 1881, and should be properly stamped according to the Indian Stamp Act, 1899. The document includes essential details such as the principal amount, interest rate, payment terms, due date, and the parties' information. It's particularly useful for straightforward lending arrangements where a more complex loan agreement might not be necessary, while still providing legal protection for both the lender and borrower under Indian jurisdiction.

What sections should be included in a Simple Note Payable Agreement?

1. Parties: Identifies the Lender and Borrower with their full legal names and addresses

2. Background: Brief context of the loan arrangement and relationship between parties

3. Definitions: Defines key terms used in the agreement including 'Principal Amount', 'Interest Rate', 'Maturity Date', etc.

4. Promise to Pay: The core obligation stating the principal amount, interest rate, and promise to repay

5. Payment Terms: Specifies payment schedule, method of payment, and due dates

6. Interest Calculation: Details how interest is calculated and compounded

7. Events of Default: Defines what constitutes default and its consequences

8. Remedies: Lender's rights and remedies in case of default

9. Governing Law: Specifies Indian law as governing law and jurisdiction

10. Execution: Signature blocks and execution requirements

What sections are optional to include in a Simple Note Payable Agreement?

1. Security/Collateral: Include when the note is secured by specific assets or collateral

2. Guarantor Provisions: Include when there is a third-party guarantor for the loan

3. Prepayment Terms: Include when early payment is allowed or if there are prepayment penalties

4. Late Payment Penalties: Include when specific penalties for late payment are to be imposed

5. Assignment: Include when transfer rights of the note need to be specified

6. Notices: Include when formal communication procedures need to be established

7. Joint and Several Liability: Include when there are multiple borrowers

What schedules should be included in a Simple Note Payable Agreement?

1. Payment Schedule: Detailed amortization schedule showing principal and interest payments

2. Collateral Description: Detailed description of any assets securing the note

3. Specimen Signatures: When required for verification purposes

4. Notice Details: Contact information and procedures for formal notices

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
























Clauses
























Relevant Industries

Banking & Financial Services

Microfinance

Small Business

Real Estate

Manufacturing

Retail

Professional Services

Agriculture

Construction

Technology

Relevant Teams

Legal

Finance

Treasury

Compliance

Credit

Risk Management

Collections

Accounts Payable

Accounts Receivable

Relevant Roles

Chief Financial Officer

Finance Manager

Accounts Manager

Legal Counsel

Compliance Officer

Credit Manager

Treasury Manager

Business Owner

Financial Controller

Risk Manager

Company Secretary

Loan Officer

Collections Manager

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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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