I thought that we were friends
Are both correct:
ich dachte, wir wären Freunde.
ich dachte, dass wir Freunde wären.
Thanks to EilliottofRivia, I now understand the importance of commas. See: https://www.duolingo.com/comment/26572354
yup both correct. in the second version you forgot the comma though.: "ich dachte, dass wir Freunde wären."
second version is a little more formal.
Great. And thanks for the correction. I'm still uncertain on how to use the comma. You comment helped a lot.
commas in german language are quite complicated, even for native speakers. but it is importent since sometimes a wrong set or forgotten comma can change the hole meaning of the the sentence.
ex: wir essen jetzt, Opa : granpa, we are going to eat now.
wir essen jetzt Opa. : we are eating granpa now.
I suppose seien would also work in place of wären in both examples, using Konjunktiv I?
yes it would work, but it is rarely used in this context. especially not in spoken form. so if the konjunktiv I is used here, it is mostly in written form like in a letter for example.