Now, even though it`s a friend of mine, I want to be in a safe corner. That is why I would like to conclude an amicable agreement with him, which states that “I am only a guarantor and that all commitments/loans contracted are only taken care of by him and are automatically debited from his savings account. (b) A friendly loan agreement may not be used for illegal purposes. The first implication is that the Friendly Loan Agreement is legally considered inconclusive. This does not mean, however, that the borrower does not have to repay the amount borrowed. The loan must be repaid in accordance with section 66 of the 1950 contract, which provides that “if an agreement is found to be void or if a contract becomes void, any person who has benefited from the agreement or contract is obliged to reinstate or compensate for it. to the person from whom he received it” (see also the case of Muhibbah Teguh Sdn Bhd v Yaacob Mat Yim  4 CLJ 853). As Shakespeare wrote, “Because the loan is often lost to both itself and its friend.” If you lend money to a friend or family member, make sure you don`t get your money back and that your relationship may never return to normal. Think twice before lending money to a friend.
Sometimes it`s better not to lend money to a friend to keep an eye on their best interests. A friend through thick and thin. We usually reach out to our friends or close family members when we need financial assistance. We lend (or borrow) money on the basis of mutual trust. As a rule, these types of loans (hand loans) are not guaranteed. In most cases, the terms of a loan are not final. If repayment (repayment of the loan) is not made, the relationship between the two parties is compromised. If the borrower and the guarantor do not repay the loan, the borrower can take legal action against both the borrower and the guarantor to recover the credit. Although the lender has the right to sue both the borrower and the guarantor, the repayable amount is still only the outstanding amount of the loan. The lender cannot recover twice, as the result is what is called a “double recovery” and the lender is unduly enriched. In addition to the need to repay the loan, other terms of the loan agreement (such as eligible interest and the application of securities) become null and void and unenforceable as soon as the contract is considered void by law.
Hi, Shreekant. This is a very good article. I have a doubt, so if you can only help me, it will be great. I know someone thanks to my cousin who would take a sum of 1 varnish and pay 1 year 5000 per month, and after a year he will return 1 varnish. Honestly, my profit would be 6,000 francs for the loan. He calls it an investment. He says he will give a bond paper that says he received 1lack from me and after 12 months, 1 lack of me will be reimbursed. But it doesn`t mention anything more than 5,000 monthly payments. What I want to know is that if he includes the monthly payments in the contract document and he doesn`t pay me those payments, could I pay him in court to get my money back? Will the bond paper be valid to fight it in court? Dear srinivas, yes, keep going! I think a credit agreement is a better option.
Please contact a civil lawyer. Dear Rakesh, why do you want to take risks? Offer to write a new PR including the amount of interest for 2 years (if applicable), then take cheques a posteriori for repayments. I don`t think the tax stamps marked a year on them. Dear Nagesh, the real estate law is approved by the Cabinet of the Union, but not yet adopted by Parliament. . . .