LOCAL RULES

Ontario promissory note requirements

Your Ontario promissory note has 8 rules to meet. ReportDraft puts every one on your checklist and checks your draft before you sign.

  • 2 years to sue from discovery, 15 years at most
  • Small Claims Court up to 50,000 dollars
  • A demand loan counted from the missed demand (s. 5 (3))
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An Ontario promissory note follows the federal Bills of Exchange Act and Interest Act shown on this page. Ontario's Limitations Act, 2002 sets the time to sue: 2 years, and for a demand note created since 2004, counted from the first failure to pay after a demand. Here is each Ontario rule with its source.

Last reviewed November 3, 2026 against the official sources listed below.

Promissory noteONTARIO / FREE CALCULATOR

Repayment schedule

PaymentDateAmountInterestPrincipalBalance
1December 1, 2026$1,010.02$15.00$995.02$2,004.98
2January 1, 2027$1,010.02$10.02$1,000.00$1,004.98
3February 1, 2027$1,010.00$5.02$1,004.98$0.00
Totals$3,030.04$30.04$3,000.00

3 monthly payments of $1,010.02, the last adjusted to the cent. Interest at 6% a year, calculated monthly on the unpaid balance.

Checks for the lender (not printed on the note)

WhatResultRule
Yearly rate stated on the note6% a year (effective 6.17% with monthly compounding): a rate stated only by the month or week would be capped at 5% a yearInterest Act s. 4
Criminal interest rateUnder the limit of 35% a year (6.17%), counting all fees and charges as interestCriminal Code s. 347
Last day to sue if the final payment is missedFebruary 2, 2029 (2 years from the day after the final payment on February 1, 2027); each earlier missed payment runs from its own dateLimitations Act, 2002 s. 4, 5 (1)
A part payment or a signed written acknowledgementUnder the Limitations Act, 2002, starts the period again from that day if made before it runs outLimitations Act, 2002 s. 13 (1), (10), (11)
Where to file for this amountSmall Claims Court: claims up to $50,000, not counting interest and costsCourts of Justice Act s. 23 (1); O. Reg. 626/00 s. 1
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What Ontario requires

  • A proceeding on a claim may not be started after the second anniversary of the day the claim was discovered: the day the claimant first knew, or reasonably ought to have known, of the loss, its cause, who caused it and that a proceeding would be appropriateLimitations Act, 2002, s. 4 and 5 (1)
  • The Small Claims Court hears actions for the payment of money of up to 50,000 dollars, not counting interest and costs, and such an action may not be started in the Superior Court of Justice without leaveO. Reg. 626/00, s. 1 (1) ยท Courts of Justice Act, s. 23 (1), (1.1)
  • For a demand obligation, the loss occurs on the first day there is a failure to perform the obligation once a demand for performance is made (for demand obligations created on or after January 1, 2004)Limitations Act, 2002, s. 5 (3), (4)
  • No proceeding may be started after the 15th anniversary of the day the act or omission the claim is based on took placeLimitations Act, 2002, s. 15 (2)
  • If a person acknowledges liability for a liquidated sum before the limitation period expires, the act or omission is deemed to have taken place on the day of the acknowledgement; it must be in writing and signed, and a part payment has the same effectLimitations Act, 2002, s. 13 (1), (9), (10), (11)
  • A person entitled to an order for the payment of money may have prejudgment interest included from the date the cause of action arose, but not where interest is payable by another right, such as an agreed rateCourts of Justice Act, s. 128 (1), (4) (g)

Time to sue on a note

Two years from discovery, 15 years at most. For demand obligations created on or after January 1, 2004, the loss occurs on the first day there is a failure to pay once a demand is made.

Payments and acknowledgements

A part payment, or a signed written acknowledgement of the amount, made before the period expires restarts it; one about interest also covers the principal.

Small Claims Court

Notes up to 50,000 dollars, interest and costs not counted, are collected in Small Claims Court.

Common mistakes

  • Stating only a monthly rate on the note.
  • Assuming a demand note can never become too old to sue on: the 15-year limit still applies.
  • Filing in the Superior Court for a note under 50,000 dollars.

Sources

Last reviewed November 3, 2026. Next review due February 3, 2027. This page explains published rules to help you write your report. It is not legal advice; the official text linked above governs.