A Friendly Loan Agreement is essential in the UAE context where informal lending between friends, family members, or associates needs to be documented for legal clarity and protection. This document type is particularly relevant in situations where traditional banking facilities are not suitable or desired, and parties wish to maintain a formal record of their arrangement while ensuring compliance with local laws and Sharia principles. The agreement must adhere to UAE Civil Code requirements and avoid interest elements prohibited under Islamic law. It typically includes detailed terms of repayment, purpose of the loan, and mechanisms for dispute resolution, while maintaining the informal nature of the arrangement. Such documentation helps prevent future misunderstandings and provides legal recourse if needed.

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

2. Background: Brief context of the friendly loan arrangement and relationship between parties

3. Definitions: Key terms used throughout the agreement

4. Loan Amount: Specification of the principal amount being lent

5. Purpose of Loan: Stated purpose for which the loan is being provided

6. Disbursement: Details of how and when the loan amount will be transferred to the Borrower

7. Repayment Terms: Schedule and method of repayment, considering Sharia compliance

8. Representations and Warranties: Basic declarations by both parties regarding their capacity to enter into the agreement

9. Events of Default: Circumstances constituting default and consequences

10. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts