Promissory Note Template Ontario Canada

PROMISSORY NOTE (UNSECURED/SECURED)

Document ID: PN-ON-[YYYYMMDD]-001
Effective Date: [Date]
Version: 1.0
Governing Jurisdiction: Province of Ontario, Canada

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LEGAL DISCLAIMER

This document is provided for informational purposes as a template. It does not constitute legal advice. The enforceability of a promissory note depends on specific factual circumstances, the presence of security interests (PPSA compliance), and the capacity of the parties. You are strongly advised to have this document reviewed by qualified Ontario legal counsel prior to execution to ensure compliance with the Limitations Act, 2002, the Interest Act (Canada), and the Personal Property Security Act (Ontario) where applicable.

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1. PARTIES

This Promissory Note (the “Note”) is made effective as of [Date] by and between:

BORROWER: [Borrower Full Legal Name], having an address at [Borrower Principal Address] (the “Borrower”).

LENDER: [Lender Full Legal Name], having an address at [Lender Principal Address] (the “Lender”).

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2. PROMISE TO PAY

For value received, the Borrower unconditionally promises to pay to the order of the Lender the principal sum of [Amount in CAD] (the “Principal Amount”), together with interest on the unpaid principal balance at the rate of [Interest Rate]% per annum, calculated [compounded monthly/annually/not compounded].

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3. REPAYMENT TERMS

The Principal Amount and all accrued interest shall be due and payable in full on [Maturity Date] (the “Maturity Date”). (Optional: Use the following if installment payments apply): Borrower shall make [Monthly/Quarterly] payments of [Amount] beginning on [First Payment Date] and continuing until the Maturity Date, at which time the remaining balance shall be paid in full.

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4. PREPAYMENT

The Borrower may prepay this Note in whole or in part at any time without penalty or premium. Any partial prepayments shall be applied first to accrued interest and then to the reduction of the Principal Amount.

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5. DEFAULT AND ACCELERATION

The occurrence of any of the following shall constitute an “Event of Default”: (a) Failure of the Borrower to make any payment when due under this Note; (b) The insolvency, bankruptcy, or assignment for the benefit of creditors by the Borrower; (c) Breach of any material representation or covenant contained herein.

Upon an Event of Default, the Lender may, at its sole option, declare the entire unpaid principal balance and all accrued interest immediately due and payable without further notice or demand.

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6. GOVERNING LAW AND JURISDICTION

This Note shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein. The parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Ontario for any disputes arising hereunder.

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7. COSTS OF COLLECTION

In the event that this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding, the Borrower agrees to pay all reasonable legal fees and court costs incurred by the Lender in enforcing this Note.

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8. WAIVERS

The Borrower hereby waives presentment, notice of dishonour, protest, and all other demands and notices in connection with the delivery, acceptance, performance, default, or enforcement of this Note.

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9. ENTIRE AGREEMENT

This Note constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, and negotiations, whether written or oral. No amendment or waiver of any provision of this Note shall be effective unless in writing and signed by both parties.

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10. SEVERABILITY

If any provision of this Note is held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision, and this Note shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

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EXECUTION

FOR BORROWER: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

FOR LENDER: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Drafting: Open this template in a word processor. Replace all bracketed text [ ] with precise legal data. Ensure the currency is explicitly stated as Canadian Dollars (CAD).
2. Verification:
   • Corporate Authority: If the Borrower or Lender is a corporation, ensure the signatory holds the office of Director or Officer with delegated authority to bind the entity. Request a Corporate Resolution if the amount is material.
   • Identity: Confirm the legal identity of the individual or entity against government-issued ID or an Ontario Business Registry search (e.g., ServiceOntario).
3. Execution:
   • Digital Signatures: Use a secure platform (DocuSign, Adobe Sign, or HelloSign). These platforms provide an "Audit Trail" confirming the identity of the signer and the integrity of the document, which is vital for Ontario court admissibility.
   • Physical: If signing in wet ink, ensure the document is signed in blue or black ink and witnessed by a third party.
4. Security Interests (Important): If this Note is meant to be secured by assets (e.g., equipment, inventory), this template is insufficient. You must execute a separate General Security Agreement (GSA) and register a financing statement under the Personal Property Security Act (PPSA) in Ontario.
5. Retention: Store the signed PDF in a secure, redundant digital archive (cloud storage with encryption) and maintain it for at least 7 years beyond the date of final repayment to comply with Ontario tax and limitation statutes.