A promise-to-pay agreement, also known as a promissory note, is a legally binding contract through which one party promises in writing or orally to pay a definite sum of money to another party at a specified date. The agreement delineates the terms that determine the specifics of the lending process.Know More
Promise-to-pay agreements typically contain the debt amount, interest rate and the date of issuance. They are a necessary part of any type of loan. In the case of mortgage contracts, the agreement between the parties gives the lender the right to take the home of the borrower in case he doesn’t abide by the terms set in the agreement.
There are two types of promise-to-pay agreements: written and oral. A written agreement needs to contain information pertaining to the repayment schedule so that it can be used as proof in court if one of the parties breaks the terms. Because oral agreements are difficult, although not impossible, to prove in court, they are typically employed in cases where the lender can afford to lose the owed sum of money.
Under the Truth in Lending Act, through which the federal government regulates promise-to-pay agreements, lenders are required to provide a statement that precisely delineates the cost of the loan, the rights of the borrower and the way lenders can assess further charges, such as late fees.Learn more about Credit & Lending
A mortgage is a legally binding contract, so it is not possible to remove a name from the loan documents until the mortgage has been paid in full. According to the San Francisco Gate Home Guides, the mortgage loan can be refinanced in the name of the person who wishes to keep ownership of the home, or the property can be sold to settle the debt.Full Answer >
There must be an offer and acceptance to create a legally binding contract, according to Nolo. In addition, because of the verbal nature of a contract, the agreement must fall outside of the statute of frauds, notes Professor Richard Warner for the Chicago-Kent College of Law.Full Answer >
A residential lease agreement is a legally binding contract between a landlord and tenant that details the terms for renting an apartment or a house as a dwelling place. Also known as a landlord-tenant lease or an apartment rental agreement, this contract is usually signed at the beginning of a rental term and stays in effect until an end date specified in the agreement.Full Answer >
Auto loan contracts cannot be transferred to third parties. Some loan contracts allow for sub-leases, in which a new user takes possession of the car and makes the payments. Not all auto loans permit sub-leases.Full Answer >