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The Simple Interest Promissory Note is commonly used in Canadian jurisdictions when one party (the lender) provides a loan to another party (the borrower) under terms where interest is calculated solely on the principal amount, not on accumulated interest. This document is essential for both personal and business lending situations where parties want to avoid compound interest complications. It must comply with Canadian federal legislation including the Interest Act and Bills of Exchange Act, as well as applicable provincial regulations. The note typically includes the principal amount, interest rate, payment schedule, default provisions, and remedies. It's particularly useful for short to medium-term loans, private lending arrangements, and business financing where straightforward interest calculations are preferred.

1. Parties: Identifies the Lender and Borrower with their full legal names and addresses

2. Promise to Pay: Clear statement of the principal amount borrowed and unconditional promise to repay

3. Interest Rate: Specifies the simple interest rate and calculation method

4. Payment Terms: Details of payment schedule, including due dates, installment amounts, and final maturity date

5. Prepayment: Terms regarding early payment options and any associated conditions

6. Default: Defines events of default and consequences

7. Remedies: Lender's rights and remedies upon default

8. Notice: Requirements for providing notices between parties

9. Governing Law: Specifies that Canadian law governs the agreement

10. Signatures: Execution block for all parties with date