IOU Agreement Template for Switzerland

An IOU Agreement is a simple written promise to repay money, commonly used in Switzerland for informal loans between friends, family members, or business associates. It documents one person's debt to another by clearly stating the borrowed amount, repayment terms, and both parties' details.

Under Swiss law, while IOUs can be legally binding, they don't carry the same weight as formal contracts or promissory notes (Schuldschein). Many Swiss residents use them for smaller personal loans, but for business transactions or larger amounts, it's better to create a formal loan agreement with notarization to ensure proper legal protection and enforcement options.

Use an IOU Agreement when lending money informally in Switzerland, especially for amounts under 5,000 CHF between friends, family members, or trusted business associates. This simple document helps prevent misunderstandings about loan terms and provides basic proof of the debt, even though it's less formal than a bank loan.

The agreement works well for short-term loans or when you need a quick, uncomplicated lending solution. However, for larger amounts or business transactions, Swiss law offers better protection through formal contracts. An IOU becomes particularly valuable if the relationship sours or repayment disputes arise, as it provides written evidence of the original arrangement.

• Basic Personal IOU: The simplest form, used for small loans between individuals, containing just the amount, date, and signatures
• Structured Payment IOU: Includes specific repayment schedules and interest terms, often used for larger personal loans
• Business IOU: More detailed version with company details and commercial terms, typically used between small business partners
• Collateralized IOU: Specifies assets serving as loan security, offering additional protection for the lender
• Multi-party IOU: Involves multiple lenders or borrowers, with clearly defined obligations for each party

• Private Lenders: Friends, family members, or individuals who lend money informally and need basic documentation of the debt
• Individual Borrowers: People who need short-term loans and prefer informal arrangements over bank financing
• Small Business Owners: Entrepreneurs who make quick loans to trusted business partners or need bridge financing
• Financial Advisors: Professionals who help structure informal loans and ensure basic legal compliance
• Debt Collectors: Agencies that may need to reference the IOU when pursuing unpaid personal debts

• Personal Details: Gather full legal names, addresses, and contact information for both lender and borrower
• Loan Specifics: Document the exact amount, currency, and date of the loan
• Payment Terms: Define repayment schedule, interest rate (if any), and payment method
• Identity Verification: Make copies of both parties' identification documents for reference
• Witness Information: Consider having a neutral third party witness the signing
• Document Format: Use our platform to generate a legally compliant IOU template that includes all required elements

• Party Information: Full legal names and addresses of both lender and borrower
• Loan Details: Precise amount, currency, and date of the loan transaction
• Payment Terms: Clear repayment schedule, interest rate (if applicable), and payment method
• Default Provisions: Consequences of missed payments or breach of agreement
• Signatures: Dated signatures of both parties, with optional witness signature
• Governing Law: Statement confirming Swiss law applies to the agreement
• Early Repayment: Terms for paying the loan before the due date

The main distinction lies between an IOU Agreement and a Credit Agreement. While both involve lending money, they serve different purposes and offer varying levels of legal protection under Swiss law.

• Formality Level: IOUs are informal documents for simple personal loans, while Credit Agreements are formal contracts with detailed terms and conditions
• Legal Protection: Credit Agreements offer stronger legal enforceability and clearer remedies in case of default, whereas IOUs provide basic evidence of debt
• Content Scope: Credit Agreements include comprehensive terms about interest rates, security, default provisions, and dispute resolution; IOUs typically only state the basic loan amount and repayment terms
• Typical Usage: Credit Agreements are used by banks, financial institutions, and businesses for significant loans, while IOUs work better for informal lending between trusted parties