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Debt Waiver Agreement Template for United Arab Emirates

A legally binding document governed by UAE law that formalizes the voluntary relinquishment of a creditor's right to collect a debt from a debtor. The agreement must comply with UAE Civil Code requirements and Sharia principles, particularly regarding the clear and unequivocal expression of the creditor's intention to waive the debt. The document includes specific provisions for debt acknowledgment, waiver terms, and releases, while ensuring compliance with UAE Central Bank regulations where applicable. It serves as a permanent record of the debt forgiveness and provides legal protection for both parties.

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What is a Debt Waiver Agreement?

A Debt Waiver Agreement is a crucial document used in the United Arab Emirates when a creditor decides to formally forgive or waive their right to collect a debt from a debtor. This document is particularly relevant in financial restructuring, dispute resolution, or as part of broader settlement arrangements. The agreement must be carefully drafted to ensure compliance with UAE Civil Code, Commercial Transactions Law, and where applicable, UAE Banking Law and Central Bank regulations. It typically includes detailed information about the original debt, clear waiver provisions, and necessary representations and warranties. The document becomes especially important during economic downturns, corporate restructuring, or when resolving family business disputes, and must be structured to respect both civil law requirements and Sharia principles that underpin UAE's legal system.

What sections should be included in a Debt Waiver Agreement?

1. Parties: Identification of the creditor and debtor with full legal names and addresses

2. Background: Details of the original debt, its origin, and current status

3. Definitions: Key terms used in the agreement including 'Debt', 'Waiver Date', and other relevant definitions

4. Acknowledgment of Debt: Clear statement of the existing debt amount and its validity

5. Waiver: Express and unequivocal waiver of the debt by the creditor

6. Release: Release of the debtor from all obligations related to the waived debt

7. Representations and Warranties: Statements by both parties regarding their capacity and authority to enter into the agreement

8. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts' jurisdiction

9. Execution: Signature blocks and execution requirements

What sections are optional to include in a Debt Waiver Agreement?

1. Conditions Precedent: Used when the waiver is subject to certain conditions being met

2. Partial Waiver Provisions: Required when only a portion of the debt is being waived

3. Security Release: Needed when there is existing security or collateral to be released

4. Regulatory Compliance: Required for regulated entities or when specific regulatory approvals are needed

5. Tax Implications: When there are significant tax consequences that need to be addressed

6. Confidentiality: When parties wish to keep the waiver confidential

7. Further Assurance: When additional actions may be required to give effect to the waiver

What schedules should be included in a Debt Waiver Agreement?

1. Schedule 1 - Debt Details: Detailed breakdown of the debt being waived, including principal, interest, and other charges

2. Schedule 2 - Original Debt Documentation: List of original debt documents being affected by the waiver

3. Schedule 3 - Security Details: Details of any security or collateral being released (if applicable)

4. Schedule 4 - Conditions Precedent: List of conditions that must be satisfied before the waiver becomes effective (if applicable)

5. Appendix A - Form of Release: Template for any additional release documents required

6. Appendix B - Required Notices: Templates for any notices required to be given to third parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Document Type

Release Agreement

Cost

Free to use

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