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The Friendly Loan Agreement is commonly used in Saudi Arabia to formalize interest-free lending arrangements between parties who have an existing relationship, whether personal or professional. This document type is particularly important in the Saudi Arabian context as it must comply with both Sharia law principles and Saudi civil regulations. The agreement typically includes detailed provisions for loan amount, repayment terms, and default scenarios, while ensuring compliance with Islamic finance principles, particularly the prohibition of interest (Riba). The document is structured to protect both parties' interests while maintaining the charitable nature of the transaction, as emphasized in Islamic finance. Key considerations include clear repayment terms, optional security provisions, and dispute resolution mechanisms that align with Saudi Arabian legal requirements.

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

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

3. Definitions: Key terms used in the agreement, including 'Loan Amount', 'Repayment Date', and other relevant terms

4. Loan Details: Specification of the loan amount, purpose, and confirmation that it is interest-free (Qard Hasan)

5. Repayment Terms: Clear schedule of repayment, including timeline and payment method

6. Borrower's Representations: Borrower's confirmation of ability to repay and current financial status

7. Borrower's Obligations: Key responsibilities of the borrower including timely repayment and notification requirements

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

9. Default Provisions: Consequences of failing to meet repayment obligations

10. Governing Law and Jurisdiction: Confirmation of Saudi law application and Sharia compliance

11. Execution: Signature blocks and execution requirements