Free Promissory Note

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Frequently Asked Questions

What is a Promissory Note?A Promissory Note is an enforceable agreement between friends, family, colleagues, business associates, or others, to pay back a loan or debt by a stated time, or upon demand. When should I use a Promissory Note?Use a Promissory Note when you want a legally enforceable agreement that lays out the terms of a loan or debt, such as the amount, payment terms, or other conditions.
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__________ of __________, __________, MB, __________ (the "Borrower")


__________ of __________, __________, MB, __________ (the "Lender")

Principal Amount:      $_____________ CAD

  1. FOR VALUE RECEIVED, The Borrower promises to pay to the Lender at such address as may be provided in writing to the Borrower, the principal sum of $_____________ CAD, with interest payable on the unpaid principal at the rate of _________% percent per annum, calculated yearly not in advance.
  2. This Note will be repaid in full on October 9th, 2015.
  3. At any time while not in default under this Note, the Borrower may pay the outstanding balance then owing under this Note to the Lender without further bonus or penalty.
  4. All costs, expenses and expenditures including, and without limitation, the complete legal costs incurred by the Lender in enforcing this Note as a result of any default by the Borrower, will be added to the principal then outstanding and will immediately be paid by the Borrower.
  5. If any term, covenant, condition or provision of this Note is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the parties' intent that such provision be reduced in scope by the court only to the extent deemed necessary by that court to render the provision reasonable and enforceable and the remainder of the provisions of this Note will in no way be affected, impaired or invalidated as a result.
  6. This Note will be construed in accordance with and governed by the laws of the Province of Manitoba.
  7. This Note will enure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the Borrower and the Lender.  The Borrower waives presentment for payment, notice of non-payment, protest and notice of protest.

IN WITNESS WHEREOF the Borrower has duly affixed their signatures under seal on this 9th day of October, 2015.

this 9th day of October, 2015.




Promissory Note

A Promissory Note, also referred to as an IOU, is a contract documenting a financial promise between two parties. The borrower (the person who received a loan) promises to pay back a sum to the lender, outlining when and how they will return the borrowed amount.

A Promissory Note is often used when the amount is fairly small or the agreement is straightforward.

Terms included in a Promissory Note:

  • The principal amount of the note, whether interest will be charged, and when it is due.
  • Payment dates, penalties for default, and collateral (if any).
  • Contact information for each party and if they are an individual or a corporation.

What is a Payment Default?

A payment default is when a borrower fails to make a payment on time, as per the agreed upon schedule. It is up to the lender to decide what payment defaults will be, and how to implement them. If a borrower misses too many payments, and provided collateral, the lender may (after taking the issue to court) seize the collateral in question in order to make up for some or all of the remaining amount due.

How do I Create a Payment Plan?

How you create your payment plan depends on the amount lent, and when you wish it to be paid in full. Most people choose to allow for monthly payments to be made on a specified day of the month. Make sure that the amount due is affordable for both the borrower and the lender, as payments that are either too high or too low could cause issues for both parties.

When do I Need a Promissory Note?

Promissory Notes, or IOUs, are generally recommended for people who have either borrowed or lent a sum of money. While you may not want to provide an IOU for the price of a coffee, a Promissory Note should be used for anything that will require payments over time or that cannot be paid back right away.

Enforcing a Promissory Note:

To enforce a Promissory Note in the event of a missed payment or loan default, you'll need to:

  • Gather all documentation of the loaned amount and the agreement.
  • Get in touch with the borrower and request the amount due.

If the borrower does not respond, your next steps would be to:

  • Contact a lawyer and request that they provide a letter of collection to the borrower.
  • Take legal action against the borrower and enforce the court's decision once it has been made.


  • Attempt to collect through a third party, such as a bank or other collection agency.
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