Should you ask a friend to sign a contract before you lend him money ?

I think your being a bit selfish. Your friend is being very safe and covering his behind. When it comes to money right now everyone is trying to get some. New business ideas are just that new business ideas and can be very shakey. If this idea fails how will you be ale to pay him back. If no contract is signed it is easier for you to just walk away and never give him the money back. It may seem a bit harsh on his part or that he doesn't trust you. That's not it at all, don't take it personally he's just making sure that that money will end up back with him at some point in time. If I am giving a large lump sum to any friend of mine where I know i am merely lending not giving I would most definitely have them sign a contract. Be happy that he's going to help you out and that he's not asking for a portion of the company earnings.. only his lent money back. As you are starting a business let me put it in buisness terms. You never enter any agreement at risk, you sign contracts and work off of those contracts that way you are working and lending on term agreements and not at risk. Good for him and good for you if he's willing to help. If you know you'll be fine in the end then what does it hurt to sign the piece of paper?

remember that it is money which comes between a friendship always. Firstly you shoudl nt be borrowing money from a friend if you really value the friendship. If youhave to borrow money for what ever reason, do not do so from a friend. wha tif you run into a loss and are unable to pay back? You woudl start avboit=ding that friend and that woudl be the end of the friendship. they say tht never lend to a friend unless you are willing to write off the at amount or else you will lose that friendship for ever. If he is asking you to sign a contract, he is only safeguarding his interest and he is right. It may not be an amount which he is willing to right off.

Your friend is being very sensible and cautious when he asked you to sign a contract. It sounds to me like you were not just askiong for a loan of a small amount for a limited time. In fact if you are oplanning to use the money to start a business then it is probably likely that it will be some time before you are in a position to repay your friend. If the business was guaranteed to succeed then you would be able to borrow from one of the financial institutions instead of asking a friend for a loan. Also if the business was guaranteed to succeed then everyone would be starting that type of business. You are probably aware that if you went to a financial institution or any other type of money lender you would also be asked to sign a contract, before they would agree to lend you any monet at all. Anyone who lent you the money you are asking for, other than your friend would possibly want regular repayments. That could inhibit the proper development of the busines as you would have less money to reinvest in the initial stages. It does not sound like this man is asking for that but rather a simple contract to say yo have borrowed the money and will repay it. This man is your friend so why would you not agree to his request when you would sign the contract from anyone else. A contract is a binding agreement that the money will be repaid at, or by, a certain time. It is also one way that your friendship can be protected because this is a business deal rather than a small personal loan from one friend to another. You say that you want to start the company/business that you can leave as a legacy for your children. That is a great gesture really BUT it will probably not come into fruition without this money you are asking your friend to lend to you. Or if you are still able to start the business without your friend's money, it will take longer. Also it could also cost you more money as you will have to borrow from somewhere else and pay interest on that other money. Just as you want to do something for the future of your children/family, it is very likely that your friend should also be wanting to make sure his money is protected for the future of his family. It makes sense to me and so I do not see that being a problem. Do you? Really I think your friend is actually protecting the friendship be making sure that money does not come between you. Good luck with your proposed business venture and I hope it works out well.

The truth is that everytime we let go of our hard earned money whether it be to a friend or to a relative, it is always best that we sign any form of agreement as to the terms of how the money would be returned in a specific time frame. There are times however, when we feel embarrassed to even bring it up. Your friend may share your interest in venturing into business. The point is this, while you have the right to refuse his offer to be a part of your business, he also has the right to ask you to sign a document regarding the money you are borrowing from him. While you have never given him a reason to doubt your credibility with loans, the fact still remained that it is still his money. Whether it is a matter of envy on his part is already immaterial since there is no way to find that out for sure. I understand your intention of leaving a legacy for your children which your friend may also share (hence, his implied intention to be a part of your business venture). But this is not enough to ruin a good friendship like what you two have. Good luck!

I feel for your sentiments friend, But let's be realistic about this issue. Even the best of friendships fall apart when it comes to owed money not being paid. Maybe if it's just a little amount of money. But if it's for business purposes. I think it is proper that you put it in contract. What if you can't pay him? That happens. I'm sure he won't sue you or anything. It's just a formality. I hope you wouldn't hold it against him. He's willing to lend you. Don't let a piece of paper ruin a good relationship.

it will depend on what type of friend she or he is and if you known then from a long time then you dont have to sign a contract. if you think the person is a trustable person then theres no need.

If you honestly intend to pay him back, what's the problem with signing a contract?

Whether it is your friend or even a family member, if you are entering any kind of agreement involving money or business you should get a written, signed agreement. This does not mean that you don't trust each other. It is a protection, not so much for your money but of your friendship. When you have a written agreement there can be no misunderstandings. Neither party will be able to say 'I thought you meant...'. With everything down in writing each persons obligations will be clear. The fact that your friend asked for a written agreement indicates the value he puts on your friendship and the respect he has for you.

Hello ronyb, I have ever lend money to my friends, and she told me she would return by one month, but later she seemed forget her, until 2 months later, when I was short of cash, I ask her to return my money coursity. I am too afraid to embrass her to return the money. And then she return my money by one week and she feel very sorry for the delay. I lent her money through by T/T money into her bank account, and I never think of asking her to sign any contact. I think if I did, then she would refuse to receive my money and would never like to speak to me again. Friends should be more supportive, should trust with each other.

I think it is just fair, though it may be offensive on your part but that should how it goes. It is just an assurance that he will be paid at the right amount at the right time. You may think you have been outsmarted with this gesture of his, or may put your friendship in jeopardy. Just think it this way, if you will pay him then the writing or contract is nothing but paper, nothing to worry about. I am sure your friend will feel the same.

There is nothing unfriendly, selfish or abnormal about signing the document. You should sign it. It's for your own and his/her protection and reminder. If he were a keen businessman, and if your transaction were suited to it, he can also use the document you sign as collateral for other contracts or for getting funds to replace the amount you have borrowed.

i think your friend must have had past experiences where he had lent money to others and not receive it back. so the contract is just to make things more certain. i don't think it has anything with him not trusting you, but he just wants not to repeat the same mistake. i have been in similar situations. i lent a friend $300, and he ran away from it. I lent another friend $2000 and told him to pay me back in 1 year. it's been 2 years and he has only paid me back $900. if i have made a contract with them, none of this would have happened i guess.

According to me we should not ask for contract before landing money...because if friend is really a friend they will automatically return your money. if friend does not return money first see the situation and intention behind it. then only judge what to react on that perticular situation.

Mind if I ask how much money that you borrowed from your friend? Maybe he/she do not have the funding to borrow you and just give an excuse to reject you in good way. If a true friends borrow money, never ask for the return. If the borrower is ready to pay, you just accepted it. But if the friend has borrowed and can't pay, just forget it. He/she might pay you one day in future or you may not know that one day you might need help from him/her. If you friend refuse to borrow you money with a contract, better not to borrow from him/her. If one day, you can't repay, you might lost a friend.

depends on the friends .... if you are asking him to sign a contract for just lending him money ... then you obviously don't trust him ...

Did you ever borrow from him before? Maybe because this time is a bigger amount so he wanted it documented. I don't see anything wrong with signing a promissory note or contract as long as all the conditions written there are fair. A contract is to protect both parties, its a documentation of all the things agreed upon by you and your friend. Its a protection for you because should anything happen to him, you have proof that the money you got from him was given to you as a loan with his consent and that you did not just take it. On the other hand, should something happen to you then it is his proof that you do owe him money. There may also be a possibility that somebody who borrowed from him did not pay him back so this time he wanted to be sure. Do not allow this simple condition to affect you or your friendship. I do business transactions with my friends all the time and we always conduct it in a business manner, with contracts, post-dated checks and stuffs like that.

oh..man..im sorry to say u are wrong this time...you should sign a contract with your friend to be something being proved, though u want to do the bussiness on your own... there is an old saying that is "even reckoning makes long friends".and it's a big deal for both u and your friends..

So you mean your friend would want to enter as co-owner in your business just because you are asking her for some loan in order to fill up the shortfall in cash? Well, well, that is some kind of abuse. I mean you are just borrowing money and not asking him to be co-owner. The most that this friend of yours could do is for you to be required to write and sign a Promissory Note to be cleared on when are you gonna pay back. Although normally friends do not go to the extent of signing Promissory Note, I believe when it comes to money, everything must be put in order. There is nothing wrong with signing a Promissory Note because anyway I presume you do really intend to pay him back anyway. It is just an assurance that you are true to your word and do not have any intention of not fulfilling your obligation. But asking you to sign a contract that would in effect make your friend a co-owner in your business is not right! Certainly, your friend is already taking advantage of your situation. You are not being selfish here but rather your friend is the one who is being so greedy. He is already trying to take advantage of you. You should rather forget about borrowing money from him. Go to other person who could lend you the money without taking advantage of you.

if you will use the money for business, i think its okay that you have a contract.i don't think friendship is the issue but its only for legality purposes.

You are confusing business and pleasure. If he is lending you money for a business venture you both need something in writing. I know you have every intention of paying it back but in six months there will always be something else that needs paying so he goes to the bottom of the list and then in a couple of years because you have paid nothing or only a token back you will resent him for bugging you for repayment. If I was your friend I would not lend you money. Already you are resentful and he has not even lent you the money yet. I would be afraid of losing your friendship so I would have you go to the bank, I am not a bank.