Beware, on demand loans may not be enforceable.
If a loan is made and it is repayable on demand or at call and no mention is made for a repayment date or the giving of notice demanding payment, beware that the loan may not be enforceable after 6 years from the date of the loan.
This is because the law treats such loans as immediately repayable after the loan is made and subject to a few exceptions, the time limited for taking action to recover the loan expires after 6 years.
In order to ensure your rights are not lost by such a limitation period, all loans, no matter how small and whether to family members or friends should be contained in a Loan Agreement.
Loan Agreements can be drafted to suit the circumstances of the matter.