QUESTION
Do I need to pay back promissory note if I never received money?
Asked on Apr 29th, 2013 on Estate Planning - Michigan
More details to this question:
Do I need to pay on a promissory note if I never received any of the funds that are stated in it? I signed a note with anticipation of buying a house. I never received the funds involved or never bought the house.
16 ANSWERS
If you were never paid the money then there was no consideration for the contract so you do not have to pay back something you never got.
Answered on Apr 30th, 2013 at 1:21 AM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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No. If you did not receive the funds stated, then the note would fail for lack of consideration.
Answered on Apr 30th, 2013 at 12:47 AM
Why is this an estate planning question? I don't understand why you would sign a promissory note and not receive the funds. Usually, this is contemporaneous or done very close together. If you never received the funds because you never borrowed any money, then the note should have been marked "cancelled" or something similar and returned to you. And why is this suddenly an issue? If you never got the money, why would the lender be coming after you for payment? Something is not right here and you do not provide enough information. If this was a real estate loan (like a mortgage) then go and talk to a real estate attorney in the county/state where the land was located. If it was a non-traditional source of funding, either see a real estate lawyer or general contracts/consumer type of lawyer and pay him/her to review whatever you signed and advise you.
Answered on Apr 30th, 2013 at 12:36 AM
If you can prove that you never asked for and/or received the money, you would not need to pay the money back. However, there are exceptions, such as if the money was automatically transferred to an account that you have access to, someone else received the money on your behalf or at your direction, or the money was transferred to to an escrow account as part of the purchase agreement. In that case , you would be obligated to pay off the note.
Answered on Apr 29th, 2013 at 8:21 PM
You may. Your first course of action is to visit with a lawyer who specializes in real estate matters.
Answered on Apr 29th, 2013 at 8:16 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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You need a cancellation agreement from the lender to who you issued the note.
Answered on Apr 29th, 2013 at 8:13 PM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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If you didn't receive any money from the person or company you gave the note to then there was no consideration and you needn't repay the note. A note is a simple contract which obligates the borrower to repay the amount he is lent.
Answered on Apr 29th, 2013 at 8:11 PM
If you received nothing then you owe nothing. You should ask for the note to be returned to you and destroyed.
Answered on Apr 29th, 2013 at 8:11 PM
In general no, the written promissory note is only the proof that you promised to repay the money. You can give validity to the promissory note if you allow it to be sold to bona fide buyer without notice. If you can, get the original note back. If not, let the whole world know that you did not receive the money and do not owe it.
Answered on Apr 29th, 2013 at 8:05 PM
Edwin K. Niles
Of course not.
Answered on Apr 29th, 2013 at 8:03 PM
2 Awards
Absolutely not.
Answered on Apr 29th, 2013 at 7:47 PM
Thomas Edward Gates
No, the contract was never completed by either party. There normally is a time period of action in the documents and, failing to act, is a basis of voiding the contract.
Answered on Apr 29th, 2013 at 7:47 PM
Business Transactions Attorney serving Los Angeles, CA
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Doland & Fraade
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Your facts indicate a "failure of consideration" and therefore you may have good defenses. You may be surprised to see how difficult it is to prove the non-occurrence of receipt of funds.
Answered on Apr 29th, 2013 at 7:45 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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No, generally would not have to pay back money which you never received. If you asked to have a promissory note returned to you and either destroyed or mark it cancelled on its face.
Answered on Apr 29th, 2013 at 7:45 PM
Probate Attorney serving New Orleans, LA
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James G. Maguire
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No liability, since there was no consideration for the note (nothing given to you in exchange).
Answered on Apr 29th, 2013 at 7:45 PM
No. There is no consideration for the promissory note, so there is nothing to pay back and it is not enforceable. In a lawsuit to collect on a note, the plaintiff would be required to prove that the funds were actually paid to you.
Answered on Apr 29th, 2013 at 7:45 PM