Promissory Note to Pay Debt with no Date for Payment

By
January 2nd, 2018

Promissory Note to Pay Debt with no Date for Payment

  Question: I am a licensed home inspector. On a rainy day this summer, I did a home inspection on a home in Chandler for the buyers. I noticed some standing water in the backyard next to the guest house which I thought was due to rain fall. Three days after the buyers moved into the home, they called me to say that there was a major plumbing leak in the guest house. I went over to their home the next day and the buyers were right. I felt very badly.

They already had a repair bill for an estimated cost of $8500. Before I left I signed a piece of paper agreeing to pay them $8500 for the repair bill, but there was no date for my payment. My plan was to pay the buyers back in two or three months, but they called the next day and wanted their $8500 immediately. I said that I didn’t have $8500 right now, and they said that they would sue me. Do I have to pay the buyers immediately the $8500 or can I wait two or three months?

  Answer: You probably signed an informal promissory note with a promise to pay the $8500 to the buyers. The promissory note omitted a material term, namely, when was the payment of $8500 to be made? A judge would have to decide what the intent of the parties was at the time of the signing of the promissory note. In other words, what did the parties intend to be a reasonable time for payment of the $8500? A judge would consider such factors as any discussions between the parties at the time of the signing of the promissory note; for example, did the buyers tell you that they first needed to have the $8500 in order to do the plumbing repairs?

  Note: In a purchase contract for a home the parties occasionally fail to state a date for the closing of the purchase of the home. The purchase contract is enforceable, but a judge would have to determine what would be a reasonable closing date. For example, a judge would consider what is the average closing date for similar properties in the community.

Published in Real Estate Contracts