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The Debt Agreement Letter is a crucial document used in Saudi Arabian business and personal transactions to formally acknowledge and structure debt obligations. It serves as a legally binding instrument that combines the requirements of Sharia law, Saudi commercial regulations, and banking practices. This document is typically used when parties need to formalize a debt arrangement without the complexity of a full loan agreement, such as in business-to-business transactions, personal loans, or commercial credit arrangements. The letter must carefully avoid any interest-based elements to maintain Sharia compliance while ensuring enforceability under Saudi law. It includes essential details such as the debt amount, purpose, repayment terms, and any security arrangements, making it suitable for both commercial and personal debt documentation. The document's format and content must align with both the Saudi Commercial Courts Law and Islamic financial principles.

1. Sender and Recipient Details: Full legal names and addresses of both the creditor and debtor

2. Date: The date of the letter, which will be considered the effective date of the debt acknowledgment

3. Subject Line: Clear identification that this is a Debt Agreement Letter

4. Debt Acknowledgment: Clear statement of the debt amount and confirmation that it has been received/is owed

5. Purpose of Debt: Description of the reason for the debt (to demonstrate legitimate business purpose and Sharia compliance)

6. Repayment Terms: Clear statement of repayment schedule, method, and currency

7. Sharia Compliance Statement: Explicit statement that the arrangement is interest-free and Sharia-compliant

8. Default Provisions: Consequences of non-payment or late payment

9. Signatures: Space for both parties to sign and date the letter