IOU Agreement Generator for United Arab Emirates

An IOU Agreement is a simple written promise to repay borrowed money or settle a debt. In the UAE, these informal documents create a basic contractual obligation between two parties, though they carry less legal weight than formal loan agreements under UAE Civil Code Article 710.

While IOUs can help track personal debts and small business transactions in the Emirates, they should include key details like the amount, payment date, both parties' names, and signatures to be enforceable. For significant amounts or business dealings, UAE courts strongly recommend using properly documented loan contracts instead of basic IOUs to ensure better legal protection.

Consider using an IOU Agreement for small, informal loans between friends, family members, or trusted business associates in the UAE. These documents work well when you need to quickly record a short-term loan without the complexity of formal banking procedures or extensive legal documentation.

For amounts under AED 10,000, an IOU offers a practical way to document casual lending while maintaining some basic legal protection under UAE Civil Code. However, for larger sums, business investments, or transactions involving real estate or valuable assets, it's essential to use formal loan agreements that provide stronger enforceability in UAE courts.

• Basic Personal IOU: Simple handwritten note for small personal loans, stating amount, date, and basic repayment terms
• Secured IOU: Includes mention of specific collateral or assets backing the debt under UAE law
• Installment IOU: Details a structured repayment schedule with specific payment dates and amounts
• Business IOU: More detailed version used between companies, including company stamps and witness signatures
• Interest-Bearing IOU: Compliant with UAE Islamic finance principles, using profit-sharing or fee structures instead of conventional interest

• Individual Lenders: Friends, family members, or acquaintances who provide personal loans and document them with IOUs
• Small Business Owners: Entrepreneurs who use IOUs for short-term financing between trusted business partners
• Borrowers: UAE residents who sign IOUs acknowledging their debt and promising repayment
• Witnesses: Third parties who validate IOU signatures, adding credibility in case of disputes
• Legal Advisors: Professionals who review IOUs to ensure basic compliance with UAE Civil Code requirements

• Basic Details: Gather full legal names, Emirates ID numbers, and contact information for both lender and borrower
• Loan Terms: Document the exact amount in AED, repayment date, and any agreed payment schedule
• Security Details: Note any collateral or assets being used to secure the debt
• Witness Information: Arrange for two witnesses and collect their identification details
• Documentation: Prepare copies of both parties' Emirates ID cards and any supporting documents
• Format Review: Use our platform to generate a legally compliant IOU that includes all mandatory UAE elements

• Identification Details: Full legal names, Emirates ID numbers, and addresses of both lender and borrower
• Loan Amount: Precise sum in AED written in both numbers and words
• Payment Terms: Clear repayment date and method of payment
• Interest/Profit Rate: Any Sharia-compliant profit sharing or fee structure, if applicable
• Witness Section: Space for two witnesses' names, signatures, and ID numbers
• Signatures: Dated signatures of both parties with company stamps for business IOUs
• Governing Law: Statement confirming UAE law jurisdiction

A key document often confused with an IOU Agreement is a Contractual Agreement. While both involve financial obligations, they serve distinctly different purposes in UAE business and legal contexts.

• Legal Formality: IOUs are informal documents primarily used for small personal loans, while Contractual Agreements are formal, comprehensive documents with full legal enforceability under UAE Civil Code
• Scope and Detail: IOUs typically only cover basic loan terms and repayment promises, whereas Contractual Agreements include detailed terms, conditions, obligations, and remedies
• Enforcement Power: IOUs offer limited legal protection in UAE courts, while Contractual Agreements provide stronger enforcement mechanisms and clearer dispute resolution procedures
• Documentation Requirements: IOUs need minimal documentation (amount, dates, signatures), but Contractual Agreements require extensive supporting documents and often legal attestation