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UKSolicitorJA, Solicitor
Category: Law
Satisfied Customers: 4312
Experience:  English solicitor with over 12 years experience
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Question about loan agreement

Customer Question

hi I have loaned some money to a friend for a number of years now and in total I have given them approximately £50,000.00. I decided that I should enter into some sort of agreement whereby the debt is in writing. However I was reading up on this and read somewhere that past consideration is no consideration. As the amount I have lent him is in the past, can I now get him to enter into a loan agreement. He is more than happy to enter into the agreement. Also I was reading somewhere that I can bypass this no consideration rule if the agreement is entered into a deed. So if I was to draft it with it being a deed, would that then be okay?

Submitted: 2 years ago.
Category: Law
Expert:  UKSolicitorJA replied 2 years ago.
Yes, correct, past consideration is not good consideration, so a loan agreement will not work now.
You correctly read that you may enter into a deed with your friend as deeds do not require consideration.
The deed may contain the same wording as the loan agreement and specify that it is a Deed and delivered by the person making it whose signature is witnessed by someone.
See here for information on how the deed should be drawn up
Alternatively, you may get a solicitor to draw it up for you.
Hope this helps