Template:Simplecontract: Difference between revisions

“'''[[Simple contract]]'''” is one that is not a “[[specialty]]” — a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt, such as a [[deed]] — and [[Limitation Act]] also puts it in contrast to:

*'''[[Insurance contract]]s''': payment claims under [[insurance contract]]s — perhaps not “simple” because of the duty of [[utmost good faith]] implied in them — who knows?

*'''[[Contract of loan]]s''': any “[[contract of loan]]” which:

:(a) does not provide for repayment at a fixed or [[Maturity|determinable date]]; [[and]] <br>

:(b) does not make the repayment obligation [[Condition precedent|conditional]] on a repayment demand by the creditor (or on any other matter);

:''[warning:strap yourselves in for this next bit]  

:“except where in connection with taking the loan the debtor enters into any [[collateral]] obligation to pay the amount of the debt or any part of it (as, for example, by delivering a [[promissory note]] as [[security]] for the [[debt]]) on terms which would exclude the application of this section to the [[contract of loan]] if they applied directly to repayment of the [[debt]].”

We quote that last bit in full because, for a short piece of text, it is bloody hard to decipher. There are no explanatory notes to the [[Limitation Act 1980]] — in the good old days, you were just meant to figure it out for yourself — but for help we do have that Law Commission bunker buster which says “section 6 does not apply where the debtor enters into a collateral obligation to pay the amount of the debt or any part of it on a fixed or determinable date or conditional on a demand for repayment (or other condition).” So if the [[promissory note]] itself is a demand loan, but it is pledged as collateral for another debt which isn’t, then it counts as having a payment date. That's the best I can do. <br>