Document background
The Loan Agreement Between Friends is essential for individuals in Canada who wish to formalize personal lending arrangements with friends or acquaintances. This document is designed to protect both parties' interests while maintaining the informal nature of their relationship. It includes all legally required elements under Canadian federal and provincial law, such as clear identification of parties, loan amount, interest rates (ensuring compliance with the federal Interest Act), repayment terms, and default provisions. The agreement is particularly useful for loans exceeding small amounts or when the repayment term extends beyond a few months. While maintaining simplicity, it provides sufficient legal protection and clarity to prevent future misunderstandings and ensure enforceability if needed.
