Cognovit Notes, also called Warrant of Attorney to Confess are a special kind of promissory noteThe word "cognovit" is latin for "he has conceded." A cognovit note is a specialized kind of promissory note useful for business transactions in Ohio. A regular promissory note documents the obligations and payment arrangements between two parties to a transaction. A cognovit note is basicaly the same thing except it contains a special clause, governed by Ohio Revised Code section 2323.13, that says that if one party fails to honor their payment obligations, then they automatically "confess judgment" in favor of the other party. What this means is that with a cognovit note, when one party misses a payment, then the other party can file a lawsuit and automatically win that lawsuit if they have a properly executed cognovit note. By signing a cognovit note, you are automatically waiving your right to participate in a lawsuit, and the other party automatically wins that lawsuit.
The cognovit note is a special kind of contract that should be prepared with the careful attention of an attorney. Ohio is one of only a couple states that allows the use of cognovit notes. Cognovit notes cannot be used for consumer transactions, but only business transactions. If you need to talk to an Ohio attorney about drafting or enforcing cognovit notes for your business transactions or otherwise, then you can call an attorney at Harris & Engler at (614) 610-9988. Harris & Engler has attorneys helping individuals and businesses all over Ohio.