Legal Question in Civil Litigation in California

Re: Promissory Notes-Penalties and Interest

You will find the answer when you try to enforce it in court. I would bet the judge will think is 'way' excessive. That doesn't mean you will lose the principle and legal interest though. If you need legal help with the suit, contact me to discuss.

Re: Promissory Notes-Penalties and Interest

If the penalty approximates what you would have lost because of default, I don't think it's excessive. It's not interest, after all. However, the more than 12% interest, though, might be considered excessive if not usurious.

Re: Promissory Notes-Penalties and Interest

Unless the note contains language explaining what the 30% is supposed to pay for and why the parties were unable to determine a fixed dollar amount instead of the percentage, it will likely be unenforceable -- especially if the amount of the note is substantial.

Re: Promissory Notes-Penalties and Interest

Generally, that would usury. However, there are numerous exceptions to the usury law. I am very familiar with this area and you may contact me.

Re: Promissory Notes-Penalties and Interest

It sounds like usuary. Usuary means over 10 % interest, unless there is a statutory exception i.e. condominum association's assessments - 12%, banks, etc. You are still allowed to recover the amount due. If you need assistance in collecting the note, please contact us.