Promissory Note Template Washington State

PROMISSORY NOTE (SECURED/UNSECURED)

DOCUMENT ID: PN-WA-2024-001
EFFECTIVE DATE: [Effective Date]
VERSION: 1.0
GOVERNING JURISDICTION: Washington State, USA

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STATUTORY & LEGAL COMPLIANCE NOTICE

This template is intended for use in the State of Washington. Laws governing promissory notes, usury rates (RCW 19.52), and commercial paper are subject to change. This document does not constitute formal legal advice. It is recommended that this instrument be reviewed by counsel to ensure compliance with current Washington State statutes, particularly regarding interest rate caps and specific requirements for consumer vs. commercial lending.

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1. PARTIES

This Promissory Note (the "Note") is made and entered into as of the Effective Date by and between:

BORROWER: [Borrower Full Legal Name], with a principal address at [Borrower Address] (“Borrower”).

LENDER: [Lender Full Legal Name], with a principal address at [Lender Address] (“Lender”).

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2. PROMISE TO PAY

For value received, the Borrower promises to pay to the Lender the principal sum of [Amount in USD] (the “Principal Amount”), together with interest on the unpaid principal balance at the rate of [Interest Rate]% per annum (the “Interest Rate”), calculated on the basis of a 365-day year.

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3. REPAYMENT TERMS

The Principal Amount and all accrued interest shall be paid as follows: (a) Installments: Borrower shall make payments of $[Installment Amount] on the [Day] of each [Month/Year], commencing on [Start Date]. (b) Maturity Date: The entire unpaid principal balance and all accrued interest shall be due and payable in full no later than [Maturity Date] (the “Maturity Date”). (c) Application of Payments: All payments shall be applied first to the payment of accrued interest, and thereafter to the reduction of the Principal Amount.

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4. PREPAYMENT

Borrower reserves the right to prepay the Principal Amount, in whole or in part, at any time without penalty or premium. Any partial prepayment shall not postpone the due date of any subsequent installment unless agreed upon in writing by the Lender.

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5. DEFAULT AND ACCELERATION

The occurrence of any of the following shall constitute an “Event of Default”: (a) Failure to make any payment when due under this Note; (b) The filing of a bankruptcy petition by or against the Borrower; (c) Breach of any covenant or representation contained herein. Upon the occurrence of an Event of Default, the Lender may, at its option, declare the entire unpaid Principal Amount and all accrued interest immediately due and payable without demand or notice.

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6. LATE CHARGES AND INTEREST

If any payment is not received by the Lender within [Number] days of the due date, a late fee of $[Amount] shall be assessed. Any amount not paid when due shall bear interest at the lesser of the maximum rate permitted by Washington law or [Rate]% per annum until paid in full.

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7. GOVERNING LAW AND VENUE

This Note shall be governed by and construed in accordance with the laws of the State of Washington. Any legal action arising under this Note shall be instituted exclusively in the courts of [County Name] County, Washington.

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8. WAIVERS

Borrower waives presentment for payment, notice of dishonor, protest, and notice of protest. No delay or omission by the Lender in exercising any right hereunder shall operate as a waiver of such right or any other right.

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9. ENTIRE AGREEMENT

This Note constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior discussions or understandings. This Note may only be amended by a written instrument signed by both parties.

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10. COLLECTION COSTS

If this Note is placed in the hands of an attorney for collection, or is collected through any legal proceeding, the Borrower agrees to pay all reasonable attorneys' fees and court costs incurred by the Lender.

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11. EXECUTION & SIGNATURES

FOR BORROWER: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Company: [Company Legal Name, if applicable] 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. Information Completion: Replace all bracketed text [...] with the specific details of the transaction. Ensure currency amounts are written in both numbers and words (e.g., "$10,000.00 / Ten Thousand Dollars").
2. Review Usury Laws: Confirm that the chosen [Interest Rate] complies with Washington State usury law (RCW 19.52.020). Generally, the rate must not exceed 12% per annum, or the higher of 4% above the Federal Reserve discount rate, unless specific exemptions apply.
3. Signatory Authority: If the Borrower or Lender is an entity (LLC, Corp), ensure the individual signing has the express authority to bind the entity via a Board Resolution or Operating Agreement.
4. Digital Signature: Utilize platforms like DocuSign or Adobe Sign. Ensure the audit trail (Certificate of Completion) is downloaded and saved alongside the executed PDF.
5. Originality: If a hard copy is executed, keep the original signed Note in a secure, fireproof location. It is a negotiable instrument; if the original is lost, enforcing the debt becomes significantly more complex.
6. Record Retention: Maintain this document for at least the duration of the statute of limitations for contract enforcement in Washington (typically 6 years per RCW 4.16.040).