The lending contract is the contract by which one of the parties delivers to the other, free of charge, a certain thing, movable or immovable, so that it can use it with the strict obligation to return it in the exact condition it was in at the time of the loan.
Provided by law for several decades, this type of contract is still unknown by the majority of the population, and it can be very useful in the most diverse situations, especially when dealing with something whose value is high or significant.
The lending contract is entered into between the lender – the person who owns the loaned thing – and the borrower – the person who will use the same thing. A certain deadline for the return of the thing must always be agreed, as well as the purpose (use) for which it is intended to be defined.
In order to understand the need for a deadline, let us assume the following situation: A lends B a residential property while he carries out improvement works on his house. As B is not sure how much time he needs, the term is not agreed upon in the contract.
However, due to the vicissitudes of life, B does not complete the works in her dwelling, but as the term of the loan agreement has not been established, even if the purpose for which it was intended has been indicated, B may, ultimately, live in the property until to his death, regardless of the request by the lender.
A different situation occurs if the contract does not establish neither a term nor the type of use that is intended to be given to the loaned good. In this case, the borrower is obliged to return the thing as soon as it is required by the lender.
There are two ways to terminate the contract: by termination and by expiry. The resolution allows that, regardless of the existence of a term, the lender, if he has just cause, can terminate the contract. The forfeiture is verified when the borrower's death occurs.
After signing the lending agreement, the lender must refrain from performing acts that prevent or restrict the use of the thing by the borrower, but even so, the lender is not obliged to ensure this use to the borrower and may, whenever he/she understands, examine or inspect your property to assess the use given to it.
The law establishes obligations for both parties: for the lender, owner of the thing, the obligations are those that are described in the contract as his responsibility; on the other hand, for the borrower, the law, among other aspects, provides for the obligation to keep and preserve the loaned thing; allow the lender to examine the thing; not apply for a purpose other than that for which the thing is intended; make prudent use of it; to allow the lender to make improvements to the thing and not to provide the use of the thing to third parties, unless the lender authorizes it.
The borrower, whenever he has knowledge of defects in the thing, knows of any threat or danger or that a third party assumes the right to the thing, has the obligation to immediately notify the lender.
So, you already know: when you lend something, mobile or immovable, with significant value, to someone else, don't hesitate! Contact a solicitor for advice and to safeguard your interests.
Author: Natércia Reiga is Solicitor and Enforcement Agent
Note: Article published under the partnership between the Sul Informação and the Order of Solicitors and Enforcement Agents
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