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Thomas, Lawyer
Category: UK Law
Satisfied Customers: 7620
Experience:  BA (Hons), PgDip, Practising Solicitor
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Hi, I am buying a house and I need help with the deposit,

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I am buying a house and I need help with the deposit, a freind is lending me the money, 4000 pounds as a short term loan. We want to setup a contract between us so everybody knows the situation, loan term, payment terms etc. My question we need to go to a solicitor to setup a contract or can we use a template from the net, and a witness to make it legally binding. Want legal jargon would we need to include in the contract? If we do need to go to a solicitor how much would we expect to pay?

Thanks for your help




Can you just confirm whether or not the sum is to be secured against the property please?


Have you told your conveyancer that he is contributing the money and, if so, what did they say?



Customer: replied 7 years ago.

No i have not told anyone apart from Mortgage broker and it wont be secured against the property.



Hi Phil,


You should tell your conveyancer and mortgage broker. You will probably be in breach of the mortgage conditions if you do not. It may or may not affect their willingness to lend to you but, as I say, it would probably be a breach which they would be entitled to enforce were they to find out.


If the intent is that the loan is to be clearly defined but simple in structure and will enable either party to sue upon it then it is not essential that you instruct a solicitor. Provided you use a sensible template and the terms are clear, there is a statement that you intend to give legal effect to the terms of the agreement and you both execute it (ie. sign and date it, preferably with two independent witnesses then it will be legally binding upon you both. Have two copies, execute both with each party keeping a counterpart to retain.


If you are both in complete agreement as to the terms then it can be quite straightforward, but if you start to disagree on terms or either of you suspect the other is unclear on the application of the terms then I would advise going and taking it to a solicitor. Their fees would probably be in the region of £150.00-250.00+Vat.


In order for one to sue the other though it is not essential in law that you have a written contract (ie. although as a solicitor I would always advise having one) - people sue on oral contracts all the time if it is obvious from the evidence/circumstances that an agreement was in existence between the two parties.

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Kind regards,



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