Document background
The Promissory Agreement is a vital financial instrument used when one party (the promisor) makes a written promise to pay a specified sum of money to another party (the promisee) under specific terms and conditions. This document type is commonly used in Canada for both business and personal lending arrangements, from simple personal loans to complex commercial financing. The agreement must comply with Canadian federal legislation, particularly the Bills of Exchange Act and Interest Act, as well as relevant provincial laws. A properly drafted Promissory Agreement includes essential elements such as the principal amount, interest rate, payment terms, and default provisions, making it a crucial tool for documenting and enforcing debt obligations in various contexts.
