| 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:
- Parties — Full legal names, entity types, principal places of business for Maker (borrower) and Payee (lender)
- Loan economics — Principal amount, interest rate (fixed or variable index + margin), day-count convention, maturity date
- Payment structure — Installment amounts/frequency, interest-only period, balloon payment date
- Security — Recording county/state, property address, legal description or reference to deed of trust/mortgage of even date
- Governing law — Jurisdiction (required for usury and prepayment penalty compliance)
- Prepayment terms — Permitted/prohibited, penalty schedule, exceptions (casualty, condemnation)
Quick Start
- Gather all prerequisites above
- Draft header with title
PROMISSORY NOTE, principal in numerals and written form, execution date, city, state
- Build sections per the template below
- 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 |
