Legal Question in Business Law in California

Re: promissary notes

should be 3 years !!!!

Re: promissary notes

California Code of Civil Procedure section 337 provides a four-year statute of limitations for "An action upon any contract, obligation or liability founded upon an instrument in writing" and I believe a promissory note would fall in this category.

Please note that the statute begins to run from the time the right to sue arises, and not from the date the note is made, nor even necessarily the date upon which it is due.

Further, the running of the limitations period is sometimes interrupted by circumstances such as incarceration of a party or other factors, so you really need an attorney's advice based on personal interview in order to be on firm ground with statute of limitations matters.

If you are the prospective plaintiff and there is any possibility that a limitations period is about to expire on you, see a lawyer at once!

Re: promissary notes

California Commercial Code section 3118 reads: "(a) Except as provided in subdivision (e), an action to enforce the obligation of a party to pay a note payable at a definite time shall be commenced within six years after the due date or dates stated in the note or, if a due date is accelerated, within six years after the accelerated due date.

(b) Except as provided in subdivision (d) or (e), if demand for payment is made to the maker of a note payable on demand, an action to enforce the obligation of a party to pay the note shall be

commenced within six years after the demand. If no demand for payment is made to the maker, an action to enforce the note is barred if neither principal nor interest on the note has been paid for a continuous period of 10 years."

This is the rule for a promissory note that is a negotiable instrument which is usually styles, "Debtor promises to pay to the order of Creditor" or "Debtor promises to pay to Creditor or order". If the note does not have the language required to make it a promissory note, then it is a written contract and governed by the 4 years statute of limitations for written contracts.

Hope this helps.