Lending money to a friend- drawing up a contract

lemoncake2

Hi guys

I am selling my car to my friend who has agreed to pay £150 a month to me over 12 months.

We would like to do this properly and wish to draw up a contract just in case things don`t go as planned. Can anyone recommend how we would go about this? Thanks

SailorSam

I wish when i gave money to some of my family in the past i'd drawn up some sort of proper agreement.

bouncydog1

Why can't your friend get a loan from their bank or withdraw the money from savings to pay?

If they haven't managed to save £1800 prior to buying a car, then once they have paid insurance etc how much chance is there of them being able to repay you?

Read all the stories on hear about lending money to friends and family and don't do it!

ILW

I would get them to give you 12 cheques for £150 each dated a month apart.

tell_it_how_it_is

Get an extra car key made before you sell, then if owt goes wrong you can take the car hostage until he coughs up.

I suppose solicitor is safest, but otherwise - just my thoughts - at the very least type up a couple of letters each and sign them together, stating and including a joint friend as a witness with their signature.

camuk81

ILW wrote: »

I would get them to give you 12 cheques for £150 each dated a month apart.

Sorry to pick that one apart, what if they cancel the cheques

whitewing

Don't do it.

ILW

camuk81 wrote: »

Sorry to pick that one apart, what if they cancel the cheques

Cancelling a cheque is a legal breach of contract.

Whilst not a perfect arrangement, probably just a good as getting a loan contract written up, which is unlikely to be practically enforceable anyway.

bargainbetty

If you want to do it properly, then let your friend know that they will need to pay in full at the start. The moment you hand over the log book the car is theirs and if you try to seize it you will be guilty of theft. You may end up having to take court action to get even a portion of your money.

Fastest way to end a friendship is something like this. Either find a different seller, or have your mate find alternative financing.

beverleyhills

Do not lend more than you can afford to lose.

bris

You don't need any proper legal agreement. A receipt and a signed IOU for £1800 is a contract in itself. Keep hold of that and issue receipts for all the payments he makes. If he stops paying a small claims court will use the IOU as proof. You can pay a solicitor £100 if you want, but all it is, is a fancy IOU.