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The Personal Loan Contract Between Friends is designed for use in Saudi Arabia when individuals wish to formalize a monetary lending arrangement with friends or acquaintances. This document is particularly important in the Saudi Arabian context as it must comply with both civil law requirements and Islamic (Sharia) principles, which prohibit interest-based lending. The agreement provides a legal framework for documenting the loan amount, purpose, repayment terms, and obligations of both parties while maintaining the spirit of Islamic finance. It's commonly used for personal loans ranging from small to substantial amounts, where parties want to ensure clear documentation of their arrangements while preserving their personal relationship. The contract includes provisions for dispute resolution and default scenarios while remaining consistent with local legal requirements and cultural norms.

1. Parties: Identification of the lender and borrower with full legal names, addresses, and national ID numbers

2. Background: Brief context of the relationship between parties and purpose of the loan

3. Definitions: Key terms used in the agreement defined for clarity

4. Loan Amount and Purpose: Specification of the principal amount and intended use of the loan

5. Disbursement: Details of how and when the loan amount will be transferred to the borrower

6. Repayment Terms: Schedule of repayment, including payment amounts and due dates

7. Method of Payment: Specified payment methods and account details for transfers

8. Early Repayment: Terms allowing the borrower to repay the loan before the due date

9. Default Provisions: Consequences of failing to make payments as agreed

10. Representations and Warranties: Statements of fact by both parties regarding their capacity to enter into the agreement

11. Governing Law: Specification that Saudi law and Sharia principles govern the agreement

12. Dispute Resolution: Process for resolving any disagreements between the parties