An IOU is a written acknowledgement of debt that one party owes another. In business transactions, an IOU may be followed by a more formal written contract. The terms of the IOU should be clearly stated, including the amount owed, the date when it is due, and any interest that may accrue. The parties should sign and date the IOU to make it legally binding.If you are considering using an IOU in a business transaction, it is important to understand all of the potential implications. An IOU can create legal obligations for both parties involved, so it is important to consult with an attorney before signing one. Additionally, if you are not able to repay the debt according to the terms of your agreement, you could face serious financial penalties or legal action from the other party involved.
