Legal Definitions - time note

A time note is a type of promissory note that specifies a future date or period for payment. Unlike a demand note, the funds are not due immediately but at a predetermined time.

A time note is a type of written promise to pay a specific amount of money to another person or entity at a predetermined future date or upon the occurrence of a specific, identifiable future event. Unlike a "demand note," which requires payment immediately when requested, a time note establishes a clear future deadline or condition for the payment obligation.

• Example 1: Fixed Future Date

  A small business owner borrows $25,000 from a private investor to purchase new equipment. They sign a document stating that the full $25,000, plus agreed-upon interest, will be repaid on June 30th of the following year.

  Explanation: This is a time note because it specifies a precise future calendar date (June 30th of the following year) when the payment is due, rather than being payable immediately upon the investor's request.

• Example 2: Future Event

  A homeowner hires a contractor to build an addition. They agree to pay the final $15,000 of the project cost once the local building inspector issues the final certificate of occupancy for the new structure.

  Explanation: This constitutes a time note because the payment is contingent upon a specific future event (the issuance of the final certificate of occupancy), rather than being due on demand or on a fixed calendar date.

• Example 3: Installment with Final Date

  A university student purchases a used laptop from a friend and agrees to pay the remaining $600 balance in three equal monthly installments of $200 each, with the final payment due on the 15th of May.

  Explanation: This is a time note because it outlines a schedule of future payments culminating in a final payment on a specific future date, clearly defining when the debt obligation will be fully satisfied.