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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
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Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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I am entering into an agreement with a friend to loan him $24,000

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I am entering into an agreement with a friend to loan him $24,000 at 10% interest to be paid yearly for 3 years. He is buying a backhoe for use in his job as a contractor.
I have typed up a loan agreement describing the backhoe (collateral) and the payment requirements, as well as his need to insure the backhoe.

What am I missing? Thanks, robert
Submitted: 4 years ago.
Category: Legal
Expert:  Dimitry K., Esq. replied 4 years ago.
Thank you for your question.

You're missing quite a few conditions here. You may want to have a clause that allows you to seek an acceleration of your loan so that if he misses a payment, you can pursue him in court. Otherwise if he misses a payment, he would technically not be in violation of the contract until three years are up and therefore you may have a harder time pursuing a claim. You may also want to have the right to accelerate the flow loan so that he does miss one payment, you can pursue him for their full remainder and not just for the amount of money that he holds you up to that point. An another good clause to have may be having a choice of law, so that if he moves to another state, you do not have to chase him there but instead pursue them where you are currently located. also, you may want to have a condition stating that if the 10% interest that you're targeting is above the usury laws, the interest that you would charge would be at the usury limit level.

Hope that helps.
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