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The Family Loan Agreement is designed for use in Saudi Arabia when family members wish to formalize financial lending arrangements while ensuring compliance with both Sharia law and Saudi civil regulations. This document is particularly relevant in situations where substantial sums are being lent between family members and formal documentation is desired for clarity and legal certainty. The agreement covers essential elements including loan amount, repayment terms, default provisions, and dispute resolution mechanisms, all structured to comply with Islamic principles prohibiting interest (riba). It's commonly used for various purposes such as property purchases, business investments, or education funding, while maintaining the special considerations required for family-based financial transactions in Saudi Arabia. The document includes options for security, guarantors, and hardship provisions, making it adaptable to various family lending scenarios while ensuring adherence to local legal requirements and cultural norms.

1. Parties: Identification of the family member providing the loan (Lender) and the family member receiving the loan (Borrower), including their full legal names and addresses

2. Background: Context of the family loan arrangement and confirmation of family relationship between parties

3. Definitions: Key terms used throughout the agreement, including 'Loan Amount', 'Repayment Schedule', and other relevant terminology

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

5. Repayment Terms: Clear schedule of repayments, including amount and frequency, without any interest component

6. Method of Payment: Acceptable payment methods and banking details for repayment

7. Default Provisions: Consequences of missing payments while maintaining Sharia compliance

8. Representations and Warranties: Confirmations from both parties regarding their capacity to enter into the agreement

9. Early Repayment: Terms allowing the Borrower to repay the loan before the scheduled completion date

10. Termination: Circumstances under which the agreement can be terminated

11. Governing Law: Confirmation that Saudi Arabian law and Sharia principles govern the agreement

12. Dispute Resolution: Process for resolving any disagreements, preferably through family mediation before legal proceedings