Document background
The Promissory Note Settlement Agreement is a crucial document used in the United Arab Emirates when parties wish to restructure or settle obligations arising from existing promissory notes. It becomes necessary when the original payment terms need modification, often due to financial constraints or business restructuring. The agreement combines elements of UAE Commercial Transactions Law governing promissory notes with settlement principles under the Civil Code, providing a legally enforceable framework for revised payment terms. Typically used in commercial and financial transactions, it offers protection to both creditors and debtors by clearly documenting the settlement terms, payment schedule, security arrangements, and consequences of default. The document must comply with UAE federal laws and may require registration or notarization depending on the settlement amount and parties involved.
