Promissory Note Sample for Work

PROMISSORY NOTE FOR PROFESSIONAL SERVICES

DOCUMENT ID: PN-SVC-2024-001
EFFECTIVE DATE: [Effective Date]
VERSION: 1.0
GOVERNING JURISDICTION: [State/Province], [Country]

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LEGAL DISCLAIMER

THIS DOCUMENT IS PROVIDED FOR INFORMATIONAL AND DRAFTING PURPOSES ONLY. IT DOES NOT CONSTITUTE LEGAL ADVICE, NOR DOES IT CREATE AN ATTORNEY-CLIENT RELATIONSHIP. PROMISSORY NOTES GOVERNED BY EMPLOYMENT OR SERVICE CONTRACTS ARE SUBJECT TO SPECIFIC LABOR LAWS, USURY STATUTES, AND REGULATORY FRAMEWORKS THAT VARY BY JURISDICTION. THE USER IS STRONGLY ADVISED TO HAVE THIS DOCUMENT REVIEWED BY LICENSED LEGAL COUNSEL IN THE APPLICABLE JURISDICTION TO ENSURE ENFORCEABILITY AND COMPLIANCE WITH LOCAL TAX AND EMPLOYMENT LAWS.

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1. PARTIES AND RECITALS

This Promissory Note ("Note") is entered into by and between: [Company Full Legal Name], a [State/Jurisdiction] [Type of Entity, e.g., Corporation], with its principal place of business located at [Company Address] ("Company"), and [Counterparty/Recipient Full Legal Name], an individual/entity residing/located at [Counterparty Address] ("Obligor").

Recitals: The Company and Obligor have entered into a Professional Services Agreement dated [Date of Agreement] (the "Underlying Agreement"). Pursuant to said agreement, the Company agrees to compensate the Obligor for professional services rendered, or the Obligor acknowledges an indebtedness to the Company arising from advance payments or services rendered, in the principal amount of $[Amount in USD] (the "Principal Sum").

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2. OPERATIVE CLAUSES

2.1 Scope of Services

The Obligor shall perform the services described in Exhibit A attached to the Underlying Agreement (the "Services"). Time is of the essence in the performance of these Services.

2.2 Compensation and Payment Terms

The Company shall pay the Obligor in accordance with the milestones defined in the Underlying Agreement. Payments shall be made within [Number] days of receipt of an undisputed invoice. Any payments not made when due shall bear interest at a rate of [Percentage, e.g., 1.5]% per month or the maximum rate permitted by law, whichever is lower, until paid in full.

2.3 Term and Termination

This Note remains in effect until the Principal Sum and any accrued interest are paid in full. Either party may terminate the Underlying Agreement upon [Number] days' written notice for a material breach. The breaching party shall have a [Number]-day cure period following receipt of written notice to rectify said breach.

2.4 Intellectual Property Ownership

All work product, designs, code, inventions, and materials created by the Obligor in connection with the Services (the "Work Product") shall be deemed a "work made for hire" for the Company. The Obligor hereby assigns all right, title, and interest in and to such Work Product to the Company exclusively.

2.5 Mutual Confidentiality and Non-Disclosure

Each party shall protect the other’s Confidential Information with the same degree of care as it uses for its own sensitive information. This obligation survives the termination of this Note for a period of [Number] years.

2.6 Representations and Warranties

Each party represents that (a) it has the full power and authority to enter into this Note, (b) the execution of this Note does not violate any other agreement to which it is a party, and (c) the Services shall be performed in a professional, workmanlike manner in accordance with industry standards.

2.7 Limitation of Liability and Indemnification

To the maximum extent permitted by law, neither party shall be liable for indirect, incidental, or consequential damages. Each party agrees to indemnify and hold harmless the other from any third-party claims arising out of the indemnifying party’s gross negligence or willful misconduct.

2.8 Dispute Resolution and Arbitration

Any dispute arising out of or related to this Note shall be settled by binding arbitration administered by [e.g., American Arbitration Association] in accordance with its Commercial Arbitration Rules. The seat of arbitration shall be [City, State]. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

2.9 Governing Law and Jurisdiction

This Note shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of laws principles.

2.10 Miscellaneous

• Severability: If any provision of this Note is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
• Counterparts: This Note may be executed in counterparts, each of which shall be deemed an original.
• Entire Agreement: This Note constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior discussions or understandings.

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3. EXECUTION

FOR [COMPANY FULL LEGAL NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Company: [Company Legal Name] Date: [Date]

FOR [COUNTERPARTY FULL LEGAL NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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4. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Drafting: Open this document in your preferred word processor. Use the "Find and Replace" feature (Ctrl+H) to populate all bracketed fields (e.g., [Company Full Legal Name]).
2. Verification of Authority: Ensure the individual signing for the Company possesses the corporate resolution or bylaws authority to bind the entity to financial obligations.
3. Digital Execution: Utilize a platform like DocuSign, Adobe Sign, or HelloSign. Ensure that "Audit Trail" or "Certificate of Completion" features are enabled.
4. Security: Once signed, save the final PDF in a secure, encrypted digital repository.
5. Retention: Under general accounting standards, maintain this document for a minimum of seven (7) years following the final satisfaction of all payment obligations, or as required by your local tax authority.
6. Filing: If the debt is secured by collateral, ensure a UCC-1 Financing Statement is filed with the Secretary of State in the relevant jurisdiction to perfect the Company's interest.