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The first implication is that the Friendly Loan Agreement is legally considered inconclusive. This does not mean, however, that the borrower does not have to repay the amount borrowed. The loan must be repaid in accordance with section 66 of the 1950 contract, which provides that “if an agreement is found to be void or if a contract becomes void, any person who has benefited from the agreement or contract is obliged to reinstate or compensate for it. to the person from whom he received it” (see also the case of Muhibbah Teguh Sdn Bhd v Yaacob Mat Yim [2005] 4 CLJ 853). Before signing the credit agreement, there are different things that both parties should keep in mind, such as: there is often disagreement over whether an offer of money is a loan or a gift. This type of transaction even gives rise to lawsuits, both parties not agreeing with the time on the intention of the loan or gift. The best way to prevent this is to sign a credit agreement. This allows all parties involved to make it clear that the transaction must be repaid. An agreement may also contain clauses that turn the loan into a gift when they are concluded, for example.B.

university degree. Friendly credit agreements are valid and can be a useful mechanism for the public to support each other in times of distress. It is important to ensure from the outset that the Friendly Loan Agreement is carefully drawn up to ensure that the lender does not violate the Moneylenders Act 1951 and also to ensure that the loan is secured and can be recovered fairly easily in the event of default. In this way, both parties are aware of all the conditions. One of the best ways to create your credit agreement is to use a credit agreement template.

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