Define: Demand Note

A demand note is a legal document that outlines the terms of a loan agreement between a lender and a borrower. It is called a “demand” note because the lender can demand repayment of the loan at any time.

The key features of a demand note include the loan amount, interest rate, repayment terms, and the lender’s right to demand repayment at any time.

A promissory note is a legal document that outlines the terms of a loan agreement between a lender and a borrower, but it has a fixed repayment date. A demand note, on the other hand, allows the lender to demand repayment at any time.

Yes, a demand note can be secured by collateral, such as real estate or personal property. This provides the lender with additional security in case the borrower defaults on the loan.

If the borrower defaults on a demand note, the lender can demand immediate repayment of the loan and take legal action to recover the debt. The lender may also seize any collateral that was used to secure the loan.

Yes, a demand note can be transferred to another party through a process called assignment. The new party becomes the legal owner of the note and has the right to demand repayment from the borrower.

Yes, a demand note is a legally binding document and can be enforced in court if necessary. The lender can sue the borrower for repayment of the loan and any associated damages.

Yes, a demand note can be cancelled or modified if both the lender and borrower agree to the changes. Any changes should be documented in writing and signed by both parties.

The statute of limitations for enforcing a demand note varies by state, but it is typically between three and six years. After this time period, the lender may no longer be able to sue the borrower for repayment.

While it is not required to have a lawyer create a demand note, it is recommended to ensure that the document is legally binding and enforceable. A lawyer can also provide guidance on the terms of the loan agreement and any potential legal issues.