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a termless note
I remeber researching this point many years ago. If the promissory note or
the oral agreement does not state a due date for the repayment of the
loan then it is due upon demand. Thus, if I were the lender, I will argue
that there is no breach of contract since the lender has not demanded
payment. And if there is no breach, the statute of limitations has not run.
Therefore, still actionable.
I remeber researching this point many years ago. If the promissory note or the oral agreement does not state a due date for the repayment of the loanthen it is due upon demand. Thus, if I were the lender, I will argue that there is no breach of contract since the lender has not demanded payment. And if there is no breach, the statute of limitations has not run. Therefore, still actionable.
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Im not so certain the statute of limitations would apply.
The elements under state law to state a breach of contract claim are: (1) The existence of a contract and its terms; (2) Whether the contract is written, oral or implied by conduct; (3) Plaintiffs performance of his or her obligations under the contract other than obligations that have been waived or excused by Defendants material breach; (4) Defendants Breach; and (5) resulting foreseeable damages to the Plaintiff.
Normally, Plaintiffs damages under a promissory note are sustained upon non-payment on or after the due date resulting in accrual of the breach of contract cause of action. If there is no due date, the Defendant may claim the Plaintiff has sustained no damages and that Plaintiffs breach of contract lawsuit is premature. It appears that the following positions can be taken by the parties: (1) the contract is too indefinite to be enforced; or (2) the contract is illusory because it doesnoral agreement specifying a due date must be invoked to supplement the writing; or (4) the Court could imply a reasonable time-of-payment term.
Harry Rebhuhn
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Dear group-mates
An attorney friend called me with an interesting question. Client signed a promissory note 27 years ago. The only information on the note is the date it commenced and 10% interest a year. No terms as to payment schedule, amount of payment, or due date of the note. No payments have ever been made and no attempts to pay were ever made. Since there are no terms to breach an argument can be made that the note is still enforceable. The question, is a 27 year old debt still enforceable when no attempt to collect was made and there is no due date on the note?
Thank you in advance
Joe
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It is unenforceable as the four year statute of limitations under
California law has run.
Wesley H. Avery, Esq.
Roquemore, Pringle & Moore, Inc.
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Los Angeles, CA 90040-2466
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http://www.rpmlaw.com
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