How do IOUs between private individuals ensure legal validity?
Lawyer's advice: Step 1:
Make sure the IOU is signed by the borrower himself. The IOU clearly states the amount of the loan, and if there is an agreement on interest, it is also clearly written. The law stipulates that a loan contract without an interest agreement is deemed to have no interest.
Step 2: Outside of the IOU, there is evidence that the loan was provided. It is best to use the transfer-to method to pay for the loan, so that the transfer record is valid evidence of the payment of the loan. If the loan is paid in cash, then a separate receipt is required, or the IOU stipulates that the loan has been paid in cash.
Please note that the IOU is proof of the legal relationship between the two parties, and the IOU itself cannot prove that the loan has been paid. It is possible that an IOU was signed, but the loan was not paid. Therefore, on the basis of the signing of the IOU, evidence of payment of the loan is also required.
Step 3: Other favorable provisions can be added to the IOU, such as the lawyer's fees for the borrower to bear the lender in the event of non-repayment. For example, the contact address is determined to be the address for the service of legal documents such as notices and summonses. These agreements are all about better protection for the party lending the funds.