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An IOU Agreement, known in Danish law as a "gældsbevis," is a written promise to repay borrowed money or settle a debt. It's a simple but legally binding document that spells out who owes what to whom, when they'll pay it back, and any interest terms that apply.

Under Danish contract law, these agreements need basic elements to be enforceable: clear identification of both parties, the exact amount owed, payment timeline, and signatures. While IOUs can be handwritten, most Danish businesses prefer typed documents to prevent disputes. The debt claim stays valid for 3 years under the Danish Limitation Act, unless the agreement specifies otherwise.

Use an IOU Agreement when lending money informally to friends, family, or business associates in Denmark. This document becomes especially valuable for loans above 2,000 kroner, where having clear written terms can prevent misunderstandings and protect both parties legally.

The agreement proves particularly useful during business-to-business transactions where formal bank loans aren't practical, or when extending payment terms to trusted customers. Danish courts recognize these documents in debt collection cases, making them essential for protecting your interests if payment issues arise. Common scenarios include short-term business loans, personal lending arrangements, and documenting repayment plans for existing debts.

• Basic Promissory Note: The simplest form, documenting a direct loan between two parties with basic repayment terms and interest rates
• Installment IOU: Structures the debt repayment in fixed periodic amounts, commonly used for larger sums in Danish business arrangements
• Secured IOU: Includes collateral provisions, giving the lender rights to specific assets if the borrower defaults
• Business Bridge IOU: Used for short-term business financing between Danish companies, often with more detailed payment and default terms
• Family Loan Agreement: A more detailed version for family lending, including gift tax considerations under Danish tax law

• Private Lenders: Individuals who loan money to friends, family, or associates and need formal documentation of the debt arrangement
• Small Business Owners: Entrepreneurs who extend credit to customers or need short-term financing from business partners
• Family Members: Relatives involved in personal lending, particularly for larger amounts requiring clear repayment terms
• Legal Advisors: Lawyers who draft or review IOUs to ensure compliance with Danish contract law and enforceability
• Debt Collectors: Professionals who may need to enforce the agreement if the borrower defaults on payments

• Party Details: Gather full legal names, addresses, and contact information for both lender and borrower
• Loan Terms: Document the exact amount, currency, interest rate (if any), and complete repayment schedule
• Payment Method: Specify how payments will be made, including bank account details or other transfer methods
• Default Provisions: Define what happens if payments are missed, including any late fees or consequences
• Signing Requirements: Prepare for both parties to sign, date, and potentially have witnesses present for larger amounts
• Documentation: Keep copies of any related correspondence or proof of fund transfer for your records

• Identification Section: Full legal names, addresses, and contact details of both lender and borrower
• Loan Amount: Precise sum in Danish Kroner, written in both numbers and words to avoid confusion
• Payment Terms: Clear repayment schedule, including dates, amounts, and method of payment
• Interest Clause: Any applicable interest rate, calculation method, and payment frequency
• Default Provisions: Consequences of missed payments and remedies under Danish law
• Governing Law: Statement confirming Danish law applies to the agreement
• Signature Block: Space for dated signatures of both parties and witnesses if required

An IOU Agreement differs significantly from a Bond Issuance Agreement in several key aspects, though both involve debt obligations. While IOUs handle simple, direct lending between parties, Bond Issuance Agreements govern more complex financial instruments issued by companies or organizations.

• Formality Level: IOUs are typically informal documents for private loans, while Bond Issuance Agreements are formal financial instruments requiring regulatory compliance
• Legal Structure: IOUs contain basic repayment terms and conditions, whereas Bond Agreements include complex provisions for multiple investors, transfer rights, and market trading
• Party Involvement: IOUs usually involve two parties directly, while Bond Agreements involve issuers, trustees, and multiple bondholders
• Regulatory Oversight: IOUs face minimal regulation under Danish law, but Bond Agreements must comply with Danish securities laws and financial regulations