Waives Presentment

The conclusion of a formal agreement between the borrower and the lender is a mandatory procedure that precedes the receipt of money. You can avoid it only if you borrow money from close friends or relatives who completely trust you.

Regardless of what type of document you sign ― a loan agreement or a promissory note ― there will be such a provision as a waiver of presentment. This provision is vital because it deprives the borrower of the opportunity to justify failure to pay the debt in full or in part by the fact that they were not notified that it was time to pay.

Thus, waiver of presentment means that the debtor assumes full obligations to pay the debt without any notice or demand from the creditor. Waiver of presentment also includes refusal of other notifications from the creditor, such as notice of non-payment, off-set, etc. The borrower is fully aware of all their obligations to the lender and is ready to fully fulfill them without any reminder or presentation of a loan agreement or promissory note by the lender.

Why Waiver of Presentment Is Necessary in Loan Agreements?

Some form of contract between the lender and the borrower is necessary to protect the interests of the lender. A lender gives their money immediately, and the full return of it by the borrower depends on many conditions, including the decency and responsibility of the debtor. Signed documents are legally binding. If the borrower does not repay the money on time, the lender can file a lawsuit to collect the balance of the debt along with interest and late payment penalties from the borrower.

If the waiver of the presentment clause were not included in the contract, the debtor could simply say in a courtroom that they did not know it was time to pay. They would justify this by saying they did not receive notice of the need for payment from the creditor and were late in repaying the debt. To avoid such excuses, the provision on waiver of presentment was standardized. This provision began to be included in agreements.

What Waiver of Presentment Means for the Borrower?

Financial discipline is an essential factor in paying off debt. Waiver of presentment means the debtor assumes full responsibility for repaying the debt and does not require or expect any additional notices from the creditor, including the presentation of a contract to receive payments on the debt.

Moreover, the waiver of presentment includes other possible notices. For example, if a debtor defaults on a loan, the creditor has the right to assign that debt to debt collectors. Nor are they obliged to send any notices to the debtor because the contract states how many days after the debt maturity the loan is considered defaulted and can be assigned to collectors or other creditors. Therefore, the inclusion of a waiver of the presentment clause in the contract means that the debtor will not be able to challenge this decision of the creditor in court because they were not notified of the assignment of the debt.

Thus, before signing a loan agreement, carefully read what you are waiving. Everything you waive is your personal responsibility and must be strictly observed.