Document background
An Unsecured Credit Agreement is a fundamental legal document used in Canadian lending practices where no collateral is required to secure the loan. This document is essential when establishing credit relationships between lenders and borrowers, whether in consumer or commercial contexts, where the lender relies primarily on the borrower's creditworthiness and promise to repay rather than on specific assets as security. The agreement must comply with Canadian federal regulations, including the Interest Act and Criminal Code provisions on interest rates, as well as applicable provincial consumer protection laws. It should be used when the parties wish to document a lending arrangement without requiring specific assets as collateral, and typically includes comprehensive terms on interest calculation, repayment schedules, default provisions, and borrower's rights and obligations.
