DEMAND NOTE Meaning and
Definition
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A demand note is a type of promissory note or IOU that outlines an agreement between two parties wherein the borrower promises to repay a specified amount of money to the lender upon request or demand. It is a legally binding document that serves as evidence of debt and outlines the terms and conditions of the loan.
The key characteristic of a demand note is that it does not have a specified maturity date like traditional loans. Instead, the lender has the authority to demand repayment of the entire loan amount at any time. This allows the lender to exercise flexibility and call upon the borrower to repay the debt whenever it is financially suitable or necessary.
Demand notes are frequently used in business transactions, especially when the terms of the loan are short-term or unclear. They are useful in situations where the lender seeks greater control over the repayment period or in cases where the borrower has less predictable cash flow. As such, demand notes often contain a higher level of interest rates as compared to longer-term loans.
The repayment terms of a demand note can vary, but they typically include details such as the principal amount borrowed, the interest rate agreed upon, the name of the lender and borrower, and any applicable penalties or fees for late payment. It is important for both parties to carefully review and understand the terms of the demand note before entering into this type of financial agreement.
Common Misspellings for DEMAND NOTE
- semand note
- xemand note
- cemand note
- femand note
- remand note
- eemand note
- dwmand note
- dsmand note
- ddmand note
- drmand note
- d4mand note
- d3mand note
- denand note
- dekand note
- dejand note
- demznd note
- demsnd note
- demwnd note
- demqnd note
Etymology of DEMAND NOTE
The term "demand note" has a straightforward etymology.
The word "demand" derives from the Old French word "demande" meaning "a request or inquiry". This in turn comes from the Latin word "demandare", which means "to entrust, order, or command".
The noun "note" comes from the Latin word "nota", which originally referred to a mark or sign. Over time, it took on the meaning of a written record or a written document.
When combined, "demand note" indicates a written document that represents a request or an order to repay a debt.
Similar spelling words for DEMAND NOTE
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