Loan For Use Agreement for United Arab Emirates

Loan For Use Agreement Template for United Arab Emirates

A Loan for Use Agreement under UAE law is a legally binding document that establishes the terms and conditions for the temporary, gratuitous transfer of an item from a lender to a borrower. Governed by the UAE Civil Code (Federal Law No. 5 of 1985) and incorporating Sharia law principles, this agreement details the rights and obligations of both parties, including the specific purpose of the loan, duration, maintenance responsibilities, and return conditions. The document ensures compliance with UAE legal requirements while providing clear guidelines for the temporary use of property without monetary consideration.

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What is a Loan For Use Agreement?

The Loan for Use Agreement (also known as Commodatum or Ariya) is essential in situations where one party wishes to temporarily grant another party the right to use specific property without charging fees or rent. This document type is particularly relevant in the UAE business environment, where such arrangements must comply with both civil law traditions and Islamic law principles. The agreement should be used when organizations or individuals need to formalize temporary transfers of equipment, facilities, or other assets for specific purposes while maintaining clear ownership rights. It must address key requirements under UAE Civil Code (Federal Law No. 5 of 1985), including detailed description of the loaned item, specific permitted uses, maintenance obligations, and return conditions. The document is crucial for protecting both parties' interests while ensuring the arrangement remains truly gratuitous in nature, distinguishing it from rental or lease agreements.

What sections should be included in a Loan For Use Agreement?

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the loan arrangement and relationship between the parties

3. Definitions: Key terms used throughout the agreement

4. Subject Matter of Loan: Detailed description of the item(s) being loaned

5. Term of Loan: Duration of the loan period, including start and end dates

6. Delivery and Return: Conditions and procedures for initial delivery and ultimate return of the loaned item

7. Permitted Use: Specific purposes and ways in which the borrower may use the loaned item

8. Borrower's Obligations: Key responsibilities including maintenance, care, and proper use of the item

9. Lender's Obligations: Responsibilities of the lender, including delivering the item in usable condition

10. Risk and Liability: Allocation of risk and responsibility for damage or loss

11. Termination: Circumstances under which either party may end the agreement early

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

13. Notices: How formal communications between parties should be made

14. Entire Agreement: Standard boilerplate confirming this document represents the complete agreement

What sections are optional to include in a Loan For Use Agreement?

1. Insurance: Required when the loaned item is of high value or where specific risks need to be covered

2. Maintenance and Repairs: Detailed section needed for complex equipment or items requiring specific maintenance

3. Sub-Lending Prohibition: Explicit prohibition of sub-lending when there's a risk of unauthorized transfers

4. Intellectual Property: Required when the loaned item involves IP rights or digital content

5. Inspection Rights: Important for valuable items where the lender needs periodic access to verify condition

6. Emergency Procedures: Necessary for items that could pose safety risks or require special handling

7. Force Majeure: Important for longer-term loans or when external factors could significantly impact the arrangement

8. Confidentiality: Required when the loan involves sensitive or proprietary items

What schedules should be included in a Loan For Use Agreement?

1. Schedule 1 - Item Description: Detailed technical specifications and condition report of the loaned item

2. Schedule 2 - Delivery and Return Procedures: Step-by-step procedures for handling the item

3. Schedule 3 - Maintenance Requirements: Specific maintenance procedures and schedules if applicable

4. Schedule 4 - Permitted Locations: List of locations where the item may be used or stored

5. Schedule 5 - Authorized Users: List of individuals authorized to use the loaned item

6. Appendix A - Condition Report: Photographs and detailed description of the item's condition at time of loan

7. Appendix B - Operating Instructions: User manual or operating procedures for complex items

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant Industries

Education

Healthcare

Manufacturing

Technology

Research and Development

Construction

Cultural and Arts

Scientific Research

Government and Public Sector

Non-Profit

Media and Entertainment

Sports and Recreation

Agriculture

Industrial Equipment

Automotive

Relevant Teams

Legal

Operations

Facilities Management

Asset Management

Risk and Compliance

Administration

Property Management

Procurement

Research and Development

Laboratory Operations

Project Management

Relevant Roles

Legal Counsel

Facilities Manager

Operations Director

Asset Manager

Property Manager

Department Head

Research Director

Laboratory Manager

Equipment Manager

Procurement Manager

Risk Manager

Compliance Officer

Project Manager

Administrative Director

Chief Operating Officer

General Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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