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The Novation of Promissory Note is a crucial document used when there is a need to substitute the debtor in an existing promissory note arrangement while maintaining the creditor's rights. This document type is commonly used in the Philippines for debt restructuring, business acquisitions, or when a third party agrees to assume existing debt obligations. It must comply with the Philippine Civil Code's requirements for novation and the Negotiable Instruments Law. The document typically includes details of the original promissory note, the outstanding amount, payment terms, and explicit consent from all parties. It's particularly important in business reorganizations, debt assumptions, and corporate restructuring scenarios where debt obligations need to be transferred while maintaining legal certainty and protecting all parties' interests.

1. Parties: Identifies all parties involved: the Original Debtor, the New Debtor, and the Creditor

2. Background: Details of the original promissory note, including its date, amount, and current status

3. Definitions: Defines key terms used in the agreement, including 'Original Promissory Note', 'Outstanding Amount', and 'Effective Date'

4. Novation: Core section stating the substitution of the new debtor and the discharge of the original debtor

5. Consideration: States the consideration for the novation

6. Representations and Warranties: Statements from all parties confirming their capacity and authority to enter into the agreement

7. Original Debtor's Release: Explicit release of the original debtor from obligations under the original promissory note

8. New Debtor's Undertaking: New debtor's commitment to assume all obligations under the promissory note

9. Creditor's Consent: Express consent of the creditor to the substitution of debtors

10. Governing Law: Specifies Philippine law as the governing law

11. Execution: Signature blocks for all parties and notarization requirements