The loan agreement is the agreement by which one party (the lender) undertakes to provide a sum of money to another party and the latter party (the borrower) undertakes to pay back an equal sum of money. A loan agreement is a special form of a so-called simple loan agreement (that also covers the loan of simple goods, etc.), which is regulated by law (Dutch Civil Code). All kinds of things can be regulated in the loan agreement, for example with regard to the repayment of the loan. This may be in instalments, but it is also possible to agree that at a certain point in time, the entire sum must be paid back. In addition, the parties can agree with one another that the lender should provide security for the repayment of the loan, for example by establishing a right of lien or pledge.
The agreement usually also involves the borrower owing the lender a charge (interest). The law stipulates that parties must record the agreed rate of interest in writing. If this is not done, the law stipulates that interest is owed at the statutory interest rate.
Acknowledgment of debt (debenture) lays down the legal relationship between the parties. Drawing up a good debenture can prevent evidential problems at a later date. This is because debenture amounts to compelling evidence. This means that the judge is obliged to accept the content of the debenture as true. But please note, the Code of Civil Procedure states that a debenture only provides compelling evidence if the deed is handwritten or if the deed bears an approval stating the sum of money in full, written by hand and in letters.
The lawyers at the AMS law practice have extensive experience of solving cases involving claims, which are due & payable in a cost-efficient manner. Our collection lawyers can advise you about the best approach and strategy, and they are always focused on avoiding problems. But if necessary, we will not shirk from legal proceedings. Read more about collection by an AMS lawyer here.
Our specialists in obligations law also have extensive experience of drawing up loan agreements. The lawyers at AMS are closely involved in their clients’ cases, work with short lines of communication and offer competitive rates. Feel free to contact us for a free meeting with no obligation.