commercial-promissory-note

name	commercial-promissory-note
title	Commercial Promissory Note
description	Drafts UCC-compliant U.S. Commercial Promissory Notes for commercial real estate finance transactions. Produces negotiable instruments with principal, interest, payment, default, and enforcement provisions protecting lender interests. Use when drafting promissory notes secured by real property, deed of trust, or mortgage in commercial lending.
author	CaseMark
author_url	https://github.com/CaseMark/skills/tree/main/skills/legal/commercial-promissory-note
license	Apache-2.0
version	0.1.0
execution_mode	open
jurisdiction	us
practice	finance
language	en
tags	["agreement","drafting","transactional"]

Commercial Promissory Note

Drafts a UCC Article 3–compliant Commercial Promissory Note for U.S. commercial real estate finance, structured to protect Payee/lender at negotiation and closing.

Prerequisites

Collect before drafting:

1. Parties — Full legal names, entity types, principal places of business for Maker (borrower) and Payee (lender)
2. Loan economics — Principal amount, interest rate (fixed or variable index + margin), day-count convention, maturity date
3. Payment structure — Installment amounts/frequency, interest-only period, balloon payment date
4. Security — Recording county/state, property address, legal description or reference to deed of trust/mortgage of even date
5. Governing law — Jurisdiction (required for usury and prepayment penalty compliance)
6. Prepayment terms — Permitted/prohibited, penalty schedule, exceptions (casualty, condemnation)

Quick Start

1. Gather all prerequisites above
2. Draft header with title PROMISSORY NOTE, principal in numerals and written form, execution date, city, state
3. Build sections per the template below
4. Run the verification checklist before finalizing

Sections

Section	Required Elements	Drafting Rules
Promise to Pay	Maker, Payee, "for value received," "to the order of"	Unconditional language only — conditions destroy UCC negotiability
Interest Rate	Rate (% p.a.), simple/compound, day-count (360 or actual/365), accrual start	Variable: SOFR index + margin, caps/floors, adjustment frequency; include usury savings clause
Payment Schedule	Payment count, amount/method, due date, commencement, maturity	Specify payment address/account; grace period before late charge
Application of Payments	Priority: (1) fees → (2) accrued interest → (3) principal	Address partial payments; flag negative-amortization risk if interest-only
Late Charges	Grace period (10–15 days typical), charge (4–5% of overdue or flat fee)	Must not exceed state maximum; acceptance ≠ waiver of default