Hand Loan Agreement Template for Saudi Arabia

The Hand Loan Agreement is a crucial document used in Saudi Arabia when formalizing interest-free loans between parties, whether individuals or businesses. It ensures compliance with both Sharia law and Saudi Arabian regulations, particularly important as the Kingdom's legal system is based on Islamic law. This agreement type is commonly used for personal loans, business financing, or family arrangements where traditional interest-bearing loans would not be appropriate or permissible. The document includes essential elements such as the loan amount, repayment terms, and parties' obligations, while explicitly stating its interest-free nature to comply with Islamic financial principles. It provides legal protection for both lender and borrower while maintaining religious and ethical compliance.

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

2. Background: Context of the loan arrangement and confirmation of Sharia compliance

3. Definitions: Key terms used in the agreement including 'Loan Amount', 'Repayment Date', and other relevant terms

4. Loan Details: Specific amount of the loan and confirmation of receipt by the Borrower

5. Islamic Finance Declaration: Express declaration that the loan is interest-free (Qard) and compliant with Sharia principles

6. Repayment Terms: Schedule and method of repayment, including any installment arrangements

7. Borrower's Obligations: Key responsibilities of the Borrower including timely repayment and notification requirements

8. Representations and Warranties: Statements of fact and promises made by both parties

9. Events of Default: Circumstances that constitute default and their consequences

10. Termination: Conditions and process for early termination or full repayment

11. Governing Law and Jurisdiction: Confirmation of Saudi Arabian law and Sharia principles as governing law

12. Execution: Signature blocks and execution requirements