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I Owe You (IOU) Template

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An I Owe You (IOU) contract is a simple 1-page document that serves as a guarantee (or “promise”) to pay back loaned money. It’s an informal contract often used among those that know and trust one another. In many cases, an IOU is used as a placeholder before an official loan agreement is drafted.


What is an I-Owe-You?

An “I Owe You” agreement is as simple as it sounds – it’s a document that says a person owes another person a sum of money. From a legal standpoint, IOUs are weak in terms of their ability to effectively bind the parties, as a legal contract requires three (3) things in order to be valid: an offer, acceptance of the offer, and consideration. Due to the simple nature of IOUs, they often leave out sections that detail repayment and interest (the consideration). This can make it exceptionally difficult to have the document enforced in a court of law (should it come to that point). However, with that in mind, IOUs come in handy for individuals looking to get something down on paper quickly, and are better than not signing something at all.

Structure of an I-Owe-You Contract

Because there is no universal format for IOU contracts, the contents of the document can vary greatly from one to the next. With this in mind, the following terms are merely a recommendation for what one should include in their IOU contract:

  • The lender’s full name;
  • The borrower’s full name;
  • The amount of money ($) borrowed;
  • The due date for the borrowed money;
  • The amount ($) the borrower will pay per month/week; and
  • The date the borrower and seller signed the document.

How to Write

Download: Adobe PDF, MS Word (.docx), OpenDocument (.odt)

Step 1 – Parties & Debt ($)

  • Field 1: The full name of the person or entity that is receiving (borrowing) the money.
  • Field 2: The full name of the person or entity that is providing (lending) the money.
  • Field 3: The amount ($) of money being loaned (in words). Ex: “Five-hundred dollars”.
  • Field 4: The amount ($) of money being loaned (as a number). Ex: “$500.00”.

Step 2 – Payment Dates

  • Field 5: Enter the due date (mm/dd/yyyy) for the full borrowed amount. The entire owed balance must be paid off by this date.
  • Field 6: The amount ($) the borrower will pay to the lender each month.
  • Field 7: Enter the day of the month the borrower must make all monthly payments by.
  • Field 8: Enter the date (mm/dd/yyyy) of the first monthly payment.

Step 3 – Signatures

  • Field 9: The date (mm/dd/yyyy) all parties signed the form.
  • Field 10: The signature of the borrower. This can be done using eSign or by printing the form and signing the form by hand.
  • Field 11: Enter the borrower’s full printed name. This can be typed or written by hand.
  • Field 12: The lender’s signature (can be done by hand or with eSign).
  • Field 13: The lender’s full printed name.
  • Field 14 (Optional): If a witness was present to view the borrower and lender sign the form, have them sign the form here.
  • Field 15 (Optional): Have the witness’ print their name here (if applicable).