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Non Interest Bearing Promissory Note for the United Kingdom

Non Interest Bearing Promissory Note Template for England and Wales

A Non-Interest Bearing Promissory Note is a legally binding written instrument under English and Welsh law where one party (the maker) makes an unconditional promise to pay a specified sum to another party (the payee) at a determined future date or on demand, without any interest accruing on the principal amount. Governed by the Bills of Exchange Act 1882, it serves as evidence of debt and can be used in various commercial and private contexts where interest-free financing is desired.

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What is a Non Interest Bearing Promissory Note?

Non Interest Bearing Promissory Notes are commonly used in England and Wales when parties wish to document a debt obligation without the complexity of interest calculations. These notes are particularly useful in family lending, business transactions where interest-free credit is offered, or in situations where religious or ethical considerations preclude the charging of interest. The document must comply with the Bills of Exchange Act 1882 and contain specific elements including the amount, payment terms, and parties' details. Unlike interest-bearing notes, these instruments maintain a fixed repayment amount throughout their duration.

What sections should be included in a Non Interest Bearing Promissory Note?

1. Date of Issue: The date when the promissory note is created and executed

2. Promise to Pay: Clear and unconditional promise to pay a specific sum of money

3. Payment Amount: The principal sum to be paid, stated both in numbers and words

4. Maker Details: Full legal name and address of the person/entity making the promise to pay

5. Payee Details: Full legal name and address of the person/entity to whom payment is promised

6. Payment Terms: Specific terms regarding when and how payment will be made

7. Signature Block: Space for maker's signature, witness signatures if required, and date of signing

What sections are optional to include in a Non Interest Bearing Promissory Note?

1. Security Provisions: Details of any collateral or assets securing the note, to be included when the note is secured

2. Default Provisions: Terms specifying what constitutes default and its consequences, included when specific default terms are needed

3. Assignment Rights: Provisions regarding the transferability of the note and any restrictions on assignment

4. Governing Law: Explicit statement of governing law, particularly important for cross-border transactions

What schedules should be included in a Non Interest Bearing Promissory Note?

1. Payment Schedule: Detailed schedule of installment payments including dates and amounts, if payments are to be made in installments

2. Security Details: Comprehensive description of any collateral or security arrangements, including asset details and registration requirements

3. Witness Attestation: Formal attestation by witnesses if required, including their names, addresses, and signatures

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

England and Wales

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions























Clauses






















Industries

Bills of Exchange Act 1882: Primary legislation governing promissory notes in England and Wales. Defines valid promissory notes (Section 83), sets formal requirements, and establishes rules for negotiability.

Law of Property (Miscellaneous Provisions) Act 1989: Relevant for formal requirements of written instruments and execution of documents.

Limitation Act 1980: Sets time limits for bringing claims, generally 6 years for simple contracts and promissory notes.

Consumer Credit Act 1974: Applicable if the promissory note is between a business and consumer. Contains regulations about form and content of credit agreements.

Unfair Contract Terms Act 1977: Ensures terms are fair and reasonable, particularly relevant if one party is a consumer.

Financial Services and Markets Act 2000: May be relevant depending on the context and parties involved. Regulates certain financial instruments.

Common Law Principles: Encompasses fundamental legal concepts including consideration, capacity to contract, and intention to create legal relations.

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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