A promissory note is typically just a type of contract. As a result, a New Jersey collections lawyer can explain to you that if the promissory note is not supported by mutual consideration, the note may not be enforceable. This means that any debts, obligations and interest payments owed through the promissory note would also not be enforceable.
Elements of a Valid Promissory Note Explained by a New Jersey Collections Lawyer
A promissory note is generally a written promise by one party to repay a loan or debt to another party. The promissory note may provide specific details like the time that the debt must be repaid, how payment will be tendered and other specific terms like interest amount.
The promissory note should clearly identify all the parties to the note, how much debt is owed, the interest on the repayment and the amount of consideration given. Consideration generally refers to what the debtor gets in return for signing the promissory note.
Determining Valid Consideration With a New Jersey Collections Lawyer
As noted above, there must be valid consideration to support the promissory note. The consideration must be mutual meaning that both parties will receive some benefit from the contract. With a promissory note, the promisor generally benefits with the loan itself as consideration. The promisee typically benefits with the promise to repay under the terms of the promissory note, such as getting paid back with interest.
The parties generally have wide discretion to determine what would be the proper consideration in a promissory note. In rare cases, a court may step in and determine that the amount of consideration that the parties bargained for is clearly disproportionate and not enough to support the promissory note, thereby invalidating the note.
Contact a New Jersey Collections Lawyer
If you have any questions about a promissory note and whether there is proper consideration to support the note, you will want to contact an experienced attorney. To learn about the specifics of your case, contact an attorney at Snelllings Law LLC by calling 973.265.6100.