Understanding Payable at a Definite Time (Banking): A Comprehensive Guide

Q: Can I change the payment date?

It depends on the terms of the instrument. Some allow for extensions or prepayments.

Q: Is this term used in all states?

Yes, it is generally governed by the U.C.C. across states, but specific rules may vary.

Definition & Meaning

"Payable at a definite time" refers to a financial instrument, such as a note payable, that is due on a specific date or after a predetermined period. According to the Uniform Commercial Code (U.C.C.) § 3-108, an instrument is considered payable at a definite time if it can be paid after a fixed period following its acceptance or at a specific time that is clear when the instrument is issued. This type of instrument may allow for prepayment, acceleration, or extension options, which can be exercised by the holder or the maker of the note.

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Legal Use & context

This term is commonly used in banking and finance, particularly in the context of promissory notes and other negotiable instruments. It is relevant in various legal areas, including civil law and commercial transactions. Users may encounter this term when dealing with loans, contracts, or other financial agreements. Utilizing legal templates from US Legal Forms can help individuals manage these documents effectively.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A business issues a promissory note that states it will be payable in six months. This note is considered "payable at a definite time" because the payment date is clearly defined.

Example 2: A borrower signs a loan agreement that specifies repayment is due on a specific date, with the option to extend the payment period if certain conditions are met (hypothetical example).

Relevant laws & statutes

The primary legal reference for this term is the Uniform Commercial Code (U.C.C.) § 3-108, which outlines the requirements for negotiable instruments, including notes payable at a definite time.

Comparison with related terms

Term	Definition	Key Differences
Payable on Demand	An instrument that can be paid at any time upon request.	Unlike "payable at a definite time," this does not specify a fixed payment date.
Promissory Note	A written promise to pay a specified amount at a designated time.	All promissory notes can be payable at a definite time, but not all are.

Common misunderstandings

What to do if this term applies to you

If you encounter a note or financial instrument that is payable at a definite time, make sure to review the terms carefully. Consider using legal templates from US Legal Forms to create or manage your documents. If the situation is complex or involves significant financial implications, consulting a legal professional is advisable.

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Quick facts

Typical duration: Specified in the instrument, often ranging from a few months to several years.
Jurisdiction: Governed by U.C.C. in most states.
Possible penalties: Varies based on the terms of the agreement and state laws.

Key takeaways

Frequently asked questions

What does "payable at a definite time" mean?

It refers to a financial instrument that specifies when payment is due, either on a specific date or after a set period.