C. A loan payable on demand as opposed to one that is payable at a set future date.
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to pronunciationLegal Definition -
Demand Instrument
(also Demand Note or Call Loan)
An instrument payable on demand, at sight, or on presentation, as opposed to an instrument that is payable at a set future date.
Black's Law Dictionary® Eighth Edition © 2004
Current Usage -
Judge: Metropolitan Had Right to Call Note on Terminella Loan
By Andrew Jensen - 2/3/2009 4:34:01 PM
The long-running dispute between Metropolitan National Bank and Fayetteville developer Tom Terminella culminated on Tuesday with a judgment in the Little Rock bank's favor.
Washington County Circuit Court Judge Kim Smith agreed with MNB's argument that its $9.63 million loan to Terminella for development of the Grand Valley Ridge subdivision was a demand note, and as such could be called at any time.
"Metropolitan had the right to demand payment of GVR, regardless of whether GVR defaulted on its obligations under the loan agreement, which it did without question in failing to pay the interest payments of January, February and March 2007, without justifiable excuse," Smith wrote.
Smith disagreed with Terminella's arguments of breach of good faith against MNB, saying the bank did not breach the implied covenant and, "in fact, Arkansas does not recognize a cause of action for such an alleged breach."
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