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Debt Forgiveness Agreement Template for Nigeria

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Key Requirements PROMPT example:

Debt Forgiveness Agreement

"I need a Debt Forgiveness Agreement for my manufacturing company to forgive 75% of a N50 million supplier debt, conditional upon the supplier maintaining an exclusive supply arrangement with us for the next three years starting March 2025."

Document background
The Debt Forgiveness Agreement is a crucial legal instrument used in Nigerian business and financial transactions when a creditor agrees to forgive all or part of a debtor's outstanding obligations. This document becomes necessary in various scenarios, including financial hardship, debt restructuring, or strategic business arrangements. It must comply with Nigerian legal requirements, including the Nigerian Contract Act and Money Lenders Act, while addressing tax implications under the Federal Inland Revenue Service Act. The agreement provides comprehensive documentation of the debt being forgiven, terms of forgiveness, mutual releases, and any conditions attached to the forgiveness. It serves as protection for both parties by clearly defining the terms of the debt forgiveness and preventing future claims related to the forgiven debt.
Suggested Sections

1. Parties: Identification of the creditor and debtor, including full legal names and addresses

2. Background: Context of the original debt, reference to loan agreements, and current outstanding amount

3. Definitions: Definitions of key terms used throughout the agreement

4. Acknowledgment of Debt: Formal acknowledgment of the original debt amount and current outstanding balance

5. Terms of Forgiveness: Specific details of the debt forgiveness, including amount forgiven and effective date

6. Tax Implications: Acknowledgment of tax consequences and responsibilities for both parties

7. Releases: Mutual releases from claims related to the forgiven debt

8. Representations and Warranties: Statements of fact by both parties regarding their capacity and authority

9. Governing Law: Specification of Nigerian law as governing law and jurisdiction

10. Entire Agreement: Confirmation that this agreement represents the complete understanding between parties

11. Execution: Signature blocks and execution requirements

Optional Sections

1. Partial Forgiveness Terms: Used when only a portion of the debt is being forgiven, specifying remaining obligations

2. Payment Plan: Include when there's a structured payment plan for any remaining debt

3. Conditions Precedent: When forgiveness is contingent on certain conditions being met

4. Confidentiality: When parties wish to keep the terms of forgiveness private

5. Future Cooperation: When ongoing obligations or cooperation between parties is required

6. Default Provisions: When there are remaining obligations that could be defaulted upon

7. Dispute Resolution: When parties want to specify alternative dispute resolution methods

8. Reporting Obligations: When there are requirements to report the forgiveness to credit agencies or regulatory bodies

Suggested Schedules

1. Schedule A - Debt Details: Detailed breakdown of the original debt, including principal, interest, and other charges

2. Schedule B - Payment History: Record of payments made to date on the debt

3. Schedule C - Forgiveness Calculation: Detailed calculation of the amount being forgiven and any remaining balance

4. Schedule D - Related Agreements: List of any related loan agreements or security documents affected by the forgiveness

5. Appendix 1 - Required Notices: Forms of any required notices to regulatory bodies or credit agencies

6. Appendix 2 - Tax Forms: Relevant tax forms or declarations required for debt forgiveness

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions






























Clauses





























Relevant Industries

Financial Services

Banking

Corporate Services

Real Estate

Manufacturing

Retail

Construction

Healthcare

Technology

Agriculture

Energy

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Tax

Credit Control

Debt Recovery

Corporate Secretariat

Business Development

Accounting

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Financial Controller

Credit Manager

Debt Recovery Officer

Risk Manager

Compliance Officer

Treasury Manager

Accounts Manager

Company Secretary

Managing Director

Business Development Manager

Tax Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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