Making a loan - does a personally written IOU letter hold any weight in law?

[Saiditagain]

I want to make my DP a loan (several thousand) to put in his bank account to help with his offset mortgage. I do not own the house with him and in the event of his death or our break up I want the full amount of the loan repaid to me. I don't expect him to pay interest on the loan.

DP says he will write an IOU letter covering this however I want to ensure the money is returned to me should something happen.

Can I have your comments please as I'm unsure of the legal implications. Does a privately written IOU letter have to be witnessed etc, etc.

I have been considering approaching a solicitor to have something written up. I guess this would be easy for them and the safest option?

I am no expert at all but I'd hazard a guess that a private one has no weight at all - could easily be faked.

Have a browse in whsmith - they have a section with legal packs like tenancy agreements, wills etc, maybe there's something there?

If the loan is several thousand, maybe it would be worthwhile investing a couple of hundred having a solicitor draw up an agreement?

No need to go to those lengths.

Make sure that bank statements record the traqnsfer of money, then get something in writing from him to acknowledge that it isn't a gift, and that it is repayable on demand.

Then keep that letter and evidence in a safe place!

that's all you need.

Oh, and if you expect him to pay interrest at any time (eg if you split up and he fials to pay you within 1 month of you demanding it back) then put it in his letter to you.

I'd suggest his letter says something like:

"Dear saiditagain

You have kindly agreed to lend me £x. You will make the payment direct into my bank account with "y". I acknowledge this is a loan and not a gift. I will have to repay it whenever you ask for it to be repaid. If I don't repay it within a month of yo asking I will pay you interest at the Nat West Bank base rate plus 4% until eventual repayment.

Signed...."

You get the picture.

Nice drafting Collaborate - you don't need anything more than that Saiditagain.

... and to answer the original question, yes an IOU scribbled on a napkin has as much weight in law as a professionally drafted loan agreement, and neither require signatures to be witnessed.

Virtually anything written and signed is a legally binding contract - think of the receipt when you buy a used car privately.

If only more people would just scribble a few words on a piece of paper and get it signed there would be far less strife and aggro in the world!

Do be a bit careful about the principle that people within a domestic situation (ie, you and DP) making agreements with each other are not doing so "intending to create legal relations" - with the result that the agreement isn't enforceable - unless the agreement makes it very clear that they ARE intending to create legal relations. So stick that bit in what you write - "We confirm that we intend this loan arrangement and the terms of this letter to be formally legally binding."

It means of course that it is better, in a domestic situation, to have something written, because you can't reliably be sure you've stuck the useful legal-relations bit into an oral agreement.

Didnt mean OP should scribble - she should word it as per legal document. I meant all these people saying 'he said he would pay the loan back' in reply to 'it was a gift!'
All hail Judge Judy!