A. Formality requirements

A. Formality requirements

Loan agreements must satisfy the formality requirements prescribed in the Money Lenders Ordinance (Cap. 163) in order to be enforceable. The major formality requirements include:

1. The money lender must make a note or memorandum in writing of the loan agreement within 7 days after the making of the agreement, have it signed personally by the borrower, and give a copy to the borrower at the time of signing. 
2. The above note or memorandum must contain all the terms of the loan agreement, including:
   • the names and addresses of the lender, borrower and any guarantor or security provider respectively; 
   • the principal amount of the loan, in words and figures; 
   • the date of making the loan; 
   • the date of making the loan agreement; 
   • the repayment terms; 
   • the interest rate per annum; 
   • the form of security (if required); and 
   • the place of negotiation and completion of the loan agreement. 
3. A summary of certain provisions of the Money Lenders Ordinance (Cap. 163) in a prescribed form must be included in or attached to the copy of the above note or memorandum to be given by the money lender to the borrower.

The court may enforce a loan agreement or security document which does not comply with the formality requirements if the court is satisfied that it would be inequitable (i.e. unfair) not to enforce it having regard to all the circumstances of the case.