Loan agreement

LOAN AGREEMENT

This loan agreement (hereinafter the "Agreement") is entered into in [City where the contract is signed] on [Contract date] between the following parties:

1. PARTIES

1.1 Lender:
[Lender's name/company]
Registry code / personal identification code: [Lender's registry code / personal ID code]
Address: [Lender's address]
Contact: [Lender's contact]
Bank account (IBAN): [Lender's bank account (IBAN)]
(hereinafter the "Lender")

1.2 Borrower:
[Borrower's name/company]
Registry code / personal identification code: [Borrower's registry code / personal ID code]
Address: [Borrower's address]
Contact: [Borrower's contact]
Bank account (IBAN): [Borrower's bank account (IBAN)]
(hereinafter the "Borrower")

1.3 Type of loan: [Type of loan]. Lender is a professional creditor (activity licence of the Financial Supervision Authority): [Is the Lender a professional creditor (FSA activity licence)?].

1.4 The Lender is not a creditor holding an activity licence of the Financial Supervision Authority. If the Lender grants the loan in the course of its economic or professional activities and the Borrower is a consumer, the Agreement is a consumer credit agreement (VÕS § 402 lg 1), and the provisions of VÕS § 402–421 apply to it unless the law provides for an exception (VÕS § 403 lg 3). Any agreement derogating from those provisions to the detriment of the consumer is void (VÕS § 421).

1.5 The Borrower is a person related to the Lender (owner, management board member or family member).

2. SUBJECT MATTER OF THE LOAN

2.1 By this Agreement, the Lender transfers a sum of money into the ownership of the Borrower, and the Borrower undertakes to return to the Lender a sum of money of the same amount in accordance with the terms agreed in this Agreement (VÕS § 396 lg 1).

2.2 The loan is granted and repaid in euros. If the purpose of use of the loan has not been agreed in the Agreement, the Borrower may use the loan at its own discretion.

2.3 Purpose of use of the loan: [Purpose of use of the loan (if any)]. The Borrower undertakes to use the loan solely for that purpose.

3. LOAN AMOUNT

3.1 Loan amount: [Loan amount (€)] euros ([Loan amount in words]).

3.2 In the case of a loan between related persons, documenting the purpose of use of the loan may be important for the assessment of tax matters, including a possible fringe benefit.

4. DISBURSEMENT

4.1 Method of disbursement: [Method of disbursement]. Date of disbursement: [Date of disbursement].

4.2 The Lender shall transfer the loan amount to the Borrower's bank account specified in clause 1.2. Proof of disbursement is a statement of the Lender's bank account showing the transfer to the Borrower's bank account.

4.3 The loan is deemed granted to the Borrower on the day on which the loan amount was received in the Borrower's bank account or handed over to the Borrower in cash. Interest begins to accrue from that day.

5. INTEREST

5.1 Interest rate: [Interest rate (%/year)]% per annum. Type of interest: [Type of interest]. Interest payment frequency: [Interest payment frequency].

5.2 Since the Lender does not act in the course of business or professional activities in granting this loan, interest applies only if the Parties have separately agreed thereon (VÕS § 397 lg 1).

5.3 Interest is calculated on the disbursed and unrepaid loan amount from the day the loan is granted until the day the loan amount is repaid. Interest shall be paid at the frequency agreed in clause 5.1; if interest is payable at the final due date, it shall be paid together with the last repayment of the loan.

5.4 If the loan is repaid before the agreed due date, interest shall be paid on the repaid amount until the day of its repayment.

6. REPAYMENT

6.1 Method of repayment: [Method of repayment]. Term of the loan: [Term of the loan (months)] months. Date of the first payment: [Date of the first payment]. Payment deadline: [Payment deadline]. Payment holiday before the first payment (in months, 0 if not applicable): [Payment holiday before the first payment (months)].

6.2 The Borrower shall repay the loan during the term of the loan in equal periodic payments, each of which includes part of the loan amount and the accrued interest.

6.3 A payment is deemed made on the day on which the amount was received in the Lender's bank account specified in clause 1.1.

6.4 If a payment made by the Borrower does not cover all amounts that have fallen due, it shall be applied first to the costs related to the collection of the claim, then to interest, then to late payment interest and lastly to the loan amount.

7. EARLY REPAYMENT

7.1 Early repayment is permitted. Early repayment fee: [Early repayment fee (% of the amount repaid early, 0 if free of charge)]% of the amount repaid early. This term has been freely agreed by the Parties and applies to the extent not otherwise provided by law.

7.2 The Borrower shall notify the Lender in advance, in writing or in a form which can be reproduced in writing, of its intention to make an early repayment and of its amount. In the event of partial early repayment, the unrepaid loan amount shall be reduced accordingly and the subsequent payments shall be recalculated.

8. LATE PAYMENT INTEREST

8.1 If the payment deadline is exceeded, late payment interest at the rate of [Late payment interest rate (%/year)]% per annum on the unpaid amount shall apply.

8.2 Late payment interest is calculated from the time the obligation falls due until its proper performance (VÕS § 113 lg 1). Late payment interest is not calculated on interest or on late payment interest (VÕS § 113 lg 6).

8.3 Payment of late payment interest does not preclude a claim for compensation for damage exceeding the late payment interest (VÕS § 113 lg 5).

9. SECURITY

9.1 Security: [Security].

9.2 Surety: [Surety's name], registry code / personal identification code [Surety's registry code / personal ID code]. Suretyship is governed by § 142 et seq. of the Law of Obligations Act. The contract of suretyship shall be entered into separately between the Lender and the surety. If the surety is a natural person, the surety's declaration of suretyship must be in written form (VÕS § 144 lg 2), and the maximum monetary amount of the surety's liability must be agreed in the contract of suretyship, otherwise the contract of suretyship is void (VÕS § 143).

9.3 If security is established for the loan, the costs related to the establishment and termination of the security shall be borne by the Borrower, unless the Parties have agreed otherwise. After full performance of the obligations arising from the Agreement, the Lender shall without delay do everything within its power to terminate the security.

10. REPRESENTATIONS AND OBLIGATIONS OF THE BORROWER

10.1 The Borrower confirms that the information provided in this Agreement is true, that no bankruptcy proceedings have been initiated against the Borrower, that the Borrower is able to repay the loan on the agreed terms and that the Borrower has no hidden debts which would prevent repayment.

10.2 The Borrower shall notify the Lender without delay of any significant deterioration of its financial situation, any risk of insolvency, any enforcement or bankruptcy proceedings initiated against it and any other circumstances which may jeopardise the repayment of the loan.

11. LENDER'S RIGHT TO CANCEL BEFORE DISBURSEMENT

11.1 The Lender may cancel the Agreement before the disbursement of the loan amount and refuse to disburse the loan if the financial situation of the Borrower has deteriorated to such an extent that the repayment of the loan is jeopardised, or if the Borrower has knowingly provided false information for the purpose of obtaining the loan. The Lender also has this right if the Borrower became insolvent before the Agreement was entered into but this became known to the Lender only after the Agreement was entered into (VÕS § 399 lg 2).

12. LENDER'S RIGHT OF EXTRAORDINARY CANCELLATION

12.1 The Lender may cancel the Agreement extraordinarily and demand the immediate repayment of the entire unrepaid loan amount together with interest and late payment interest if: 1) repayment of the loan in instalments has been agreed and the Borrower is in delay with the repayment of more than two instalments or with the repayment of one instalment for more than three months; 2) the Borrower fails to perform the obligation to pay interest; 3) the Borrower breaches the obligation to use the loan solely for the agreed purpose (VÕS § 399 lg 1).

12.2 Before cancelling the Agreement, the Lender shall grant the Borrower a reasonable time limit for remedying the breach.

12.3 The grounds specified in clause 12.1 do not preclude the Lender's right to cancel the Agreement on any other ground provided by law, in particular in the event of a fundamental breach of contract (VÕS § 116).

12.4 The notice of cancellation shall be given in writing or in a form which can be reproduced in writing and shall state the ground for cancellation and the amount to be repaid.

13. NOTICES

13.1 All notices related to this Agreement which have legal consequences shall be given in writing or in a form which can be reproduced in writing (including by e-mail) at the contact details specified in clause 1. Any change in contact details must be notified to the other Party immediately.

13.2 Notices of a purely informative nature may also be communicated by telephone.

14. CONFIDENTIALITY

14.1 The loan terms and the financial data of the Parties are confidential and shall not be disclosed to third parties, except on a legal basis, to a Party's legal or tax adviser, auditor or financier subject to an equivalent confidentiality obligation, and to the extent necessary for the protection of rights arising from the Agreement.

14.2 The Parties shall process each other's personal data solely for the conclusion and performance of the Agreement and for the protection of claims arising from the Agreement, in accordance with the General Data Protection Regulation (EU) 2016/679.

15. DISPUTE RESOLUTION

15.1 Disputes arising from this Agreement shall be resolved through negotiations. Failing agreement, the dispute shall be resolved as follows: [Dispute resolution]. The law of the Republic of Estonia applies.

16. FINAL PROVISIONS

16.1 Amendments and supplements to the Agreement, including amendments to the payment schedule, shall be made in writing or in a form which can be reproduced in writing and shall enter into force once both Parties have confirmed them.

16.2 The Borrower may not transfer the obligations arising from the Agreement to a third party without the prior written consent of the Lender. The Lender may assign a claim arising from the Agreement in accordance with the procedure provided by law (VÕS § 164) and shall notify the Borrower of the assignment.

16.3 Upon the death or dissolution of a Party, the rights and obligations arising from the Agreement pass to its legal successors in accordance with the procedure provided by law.

16.4 A Party's failure to exercise a right arising from the Agreement or a one-time extension of a payment deadline shall not be deemed a waiver of that right. Each Party shall bear its own costs related to entering into the Agreement.

16.5 If any provision of the Agreement is or becomes invalid, this shall not affect the validity of the remaining provisions. The Parties shall replace the invalid provision with a valid one which is as close as possible to it in its economic substance.

16.6 The Agreement (together with its annexes) constitutes the entire agreement between the Parties concerning the grant of the loan. The Agreement enters into force once both Parties have signed it and remains in force until full performance of the obligations arising from the Agreement.

17. LEGAL BASIS

17.1 This loan agreement is governed by §§ 396–401 of the Law of Obligations Act. A loan granted by a professional creditor to a consumer (consumer credit) is subject to separate and stricter regulation (VÕS § 402–421) and requires an activity licence of the Financial Supervision Authority — this Agreement does not cover such a situation.