The promissory note is a paper statement written according to specific formalities as stipulated in the Commercial Papers Law, according to which the issuer of the promissory note undertakes to pay a certain amount of money at a specific time to the account of another person known as the beneficiary.
What distinguishes the promissory note is that it is one of the commercial papers that are used as a guarantee of financial rights due to its ease and frequent use. The promissory note is also characterized by fairness and transparency.
In this article, we get acquainted with the conditions that must be met for the validity of the bond and the invalidations of a promissory note in addition to its types and punishments. So follow us…………
What are the parties included in the bond for an order?
- The first party is the issuer of the bond or the obligor, known as the debtor, and it is the person who is responsible for paying the value of the bond according to the terms that have been agreed upon.
- The second party is the creditor or payee, and the bond is due for fulfillment upon request or on the agreed date, and the creditor is the owner of the right that the debtor must fulfill.
Conditions for the validity of the bond for an order?
The formula of the promissory note is considered one of the most important pillars on which the validity of the promissory note depends, and this is according to what was stated in the Commercial Papers System. In order to ensure the validity of the promissory note, you must follow the following steps:
- First, you must write the promissory note document sentence at the beginning of the instrument, and it should be written in Arabic.
- The bond must contain all important information and data.
- The amount that has been set must be estimated in Saudi riyals.
- Writing the place where the bond was drawn up, as well as the debtor’s name, place of residence and nationality.
- Undertaking to pay the agreed amount of money without objection, taking into account the writing of this pledge.
The basic data that must be included in the bond for an order?
A promissory note is a legal document that obliges the debtor to pay the financial dues owed by the creditor, so it is written in the form of a pledge, and this pledge must include some basic data, which are:
- A written undertaking from the debtor to pay the agreed amount of money to the creditor.
- Write the due date of the agreed amount of money.
- Write the place of fulfillment of the obligation and the delivery of the agreed amount of money.
- The name of the person to be paid.
- The date on which the promissory note was signed.
- The place where the promissory note was signed.
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Heroines of support for an order in the Saudi regime?
The cases in which the promissory note is invalidated are as follows:
- The expiration of the period of time that was recorded and thus the expiry of the commercial papers. This period is determined by three years calculated from the date of maturity of the bond.
- If the bond includes a condition of recourse without protest, then in this case the lawsuit for recourse against the endorsers shall prescribe with the lapse of six months, and it shall be calculated from the date of payment of the beneficiary or the date of payment of the issuer of the bond or the day on which the lawsuit was filed.
Who can issue the bond for an order?
The promissory note is a procedure that takes place between two persons, the creditor and the debtor. Banks have absolutely nothing to do with issuing the bond, and the debtor also has no right to issue the bond. Rather, the only party that can issue the promissory note is the creditor only because he is the owner of the right.
Types of promissory notes?
The promissory note has many types, including:
- Simple Promissory Note: It is an authorization granted to individuals and companies to carry out specific activities.
- Real estate bond: It is an official document that is used to register real estate property rights. This bond is issued through the General Authority for Lands and Registration in the Kingdom of Saudi Arabia.
- Commercial Bond: It is a short-term financial document that is used to finance the working capital needs of companies and charitable institutions.
- investment bond.
- Car bond.
Order form
The promissory note form should contain the following:
- Writing the word promissory note in Arabic at the beginning of the document.
- Write the date on which the bond was created.
- He also mentioned the place where the promissory note was held
- Write the agreed amount in Saudi riyals.
- Write down the nationality of the debtor.
- An undertaking to pay the aforementioned amount of money without protest costs.
- The name of the debtor, his place of residence, and his signature.
The holder of the bond must be alerted that it is his responsibility to claim the bond for order immediately in the event of maturity, and in the event that the bond is not fulfilled, the holder of the bond must be required to fulfill it during the limitation period.
Bond lawyer in Riyadh
If you have a dispute related to the commercial system, promissory note or other executive documents and want to resort to commercial litigation, please feel free to contact us. Trading system experts At Al-Othman Law Firm, because they have legal experts whose experience extends for more than 15 years in commercial systems, and the expertise of their staff of consultants exceeds more than 22 years in Saudi commercial systems and includes Al-Othman Company The best commercial lawyer in Saudi Arabia and Riyadh.
And the office of Al Othman Lawyers and Consultants is pleased to serve you, so do not hesitate to Contact us and consult us Where the Al-Othman law firm is considered one of the best offices in the Kingdom
Call the commercial Law experts at Al Othman office on +966-535-008-888
The penalty of not fulfilling the Promissory note in KSA
The promissory note is considered a tool for the implementation of the obligation. In the event that the debtor breaches this obligation and does not fulfill it, a severe penalty is imposed on the debtor, which is to imprison the debtor until the debt is fulfilled, in addition to a financial fine or seizure of the private bank account by preventing services Withdrawals, deposits, bank transfers, and suspension of government services. The aim of imposing these penalties is to force the debtor to pay the financial dues due.
The penalty for the order varies into two types: compulsory penalties and optional penalties
First, mandatory penalties
These are the penalties that the judge must abide by, and they are as follows:
- Depriving the debtor of travel.
- Disclosure and disclosure of the debtor’s current funds as well as the funds received.
- Disclosure of the debtor’s commercial register.
Secondly, optional penalties
It is what the judge may estimate according to what he deems appropriate in the circumstances of the incident, including:
- Forcing government agencies not to deal with the debtor.
- Forcing the financial authorities not to deal with it.
- The order to detain the debtor.
- Disclosure of the debtor’s private funds, as well as the funds of his wife and children, and a thorough investigation of these funds and of anyone suspected of transferring funds to him.
The contact number for the trading system and bond experts at Al Othman’s office +966-535-008-888
Frequently Asked Questions
What is the difference between a promissory note and an executive bond?
The promissory note is an executive note, but the difference between the promissory note and the executive note is that in the promissory note, the payee is responsible for paying according to his choice, either the amount mentioned in the document or what acts in its place in any legal tender.
Is the promissory note invalidated if it is without a maturity date?
The Ministry of Justice in the Kingdom of Saudi Arabia has determined the period necessary to pay the dues of the bond for an order in the absence of a due date, which is one year from the date of creating the bond in addition to three other years after this year.
What is the validity period of the bond for an order?
The law in the Kingdom of Saudi Arabia clarified the validity period of the bond for an order, which is three years from the date of maturity of the bond, and this is for the purpose of obtaining the financial dues that were agreed upon in the commercial papers, and if the debtor objects to the payment of the amount of money, then the creditor has the right to file a lawsuit in court.
Conclusion
Thus, we have come to the end of the article in which we talked about the invalidations of a promissory note, its types, and the penalties imposed on it, and it is worth noting that it is necessary to seek the help of a lawyer who specializes in promissory notes and similar matters, and the best lawyer in Jeddah and Riyadh that you can rely on and consult is Al Othman Law Firm It includes a distinguished group of specialists in such issues, so do not hesitate to contact them.
Call the commercial Law experts at Al Othman office on +966-535-008-888
