Loan agreement

A loan agreement refers to a free loan of property or furniture that must be returned undamaged to the lender. The word comodato comes from the Latin word commodore which means “to lend . ” This agreement is for the sole benefit of the borrower and is one of three types of contracts for permissive use . When the debtor of a contract is obliged to return to the creditor a movable property that the creditor has delivered to the debtor for personal use, without any consideration, then said contract is called a loan agreement.

What is a loan agreement for?

The loan or loan agreement is a very important civil contract that helps us avoid any type of problems in the future with respect to the ownership of things if we do not make use of it, when we deliver something that is ours to someone else. , as a loan for use.

Serves as a contract by which one party, the bailor , gives free the other, the bailee , one thing for it to make use of it for some time and that they will then return to a close . It is a way of giving only the possession of a thing and not of giving the property of it.

Characteristics

The main characteristics of the loan agreement are the following:

• It is a unilateral contract since there is only an obligation on the part of the borrower.
• The borrower must keep the object or furniture in good condition .
• If there is damage to the object, the borrower must repair it when the contract ends.
• It is a free contract .
• It only reports profits for the borrower and not for the borrower .
• The lender is the one who must bear the lien of lending a good.
• It is a typical or nominated contract because it is regulated by law.
• It is a real contract since the object or thing needs to be delivered.
• It is deferred execution .
• In case of loss , the borrower must respond for it.
• When the borrower must make a repair , the lender must reimburse the expense.
• The borrower must endeavor to keep the property in the best possible condition.
• The borrower may not grant a third party the use of the property, except with the prior authorization of the lender.

Elements of the loan agreement

The elements that make up the loan agreement are the following:

• Consent : since the loan agreement is a real contract, the delivery of the thing must be perfected not only with the consent of the parties.
• Capacity : you must have the necessary capacity to be obliged to make a loan agreement, so both parties must have the capacity to exercise
• Object : as an object, anything, furniture or property that is within the trade can be given as a loan . In view of the fact that the contract is not transferrable , then it can be given as a loan, inalienable things or over which the lender only has an inalienable right .
• Delivery of the thing : since the loan is a real contract, its completion requires the delivery of the thing.
• The comforter , who is the owner of the thing.
• The borrower who is the one who will use the thing and who must be in charge of restoring it.

Effects edit

Within the fiscal effects of the loan contract, we can mention the deduction of expenses to conserve the property, which can be deducted by both the lender and the borrower, depending on the type of expense made and what is stipulated in the same contract.

The borrower can deduct the expenses that he needs to be able to keep the good delivered, the loan, and those that have been stipulated in the contract; as long as the good is used for the purposes of the physical or moral person .

The lender can also deduct the expenses that he makes with respect to the delivered good, as long as they have been stipulated in the corresponding contract.

Advantages of the loan agreement

Among the main advantages of preparing a loan agreement are:

• You can enjoy the good without paying for it, because if it were paid it would no longer be a loan but a lease .
• The person who lends the furniture or property retains the property, since the borrower only has possession of the property.
• The property is returned to its owner in the time stipulated in the contract.
• The person to whom the property is loaned may never claim property ownership prescription , since he signs a contract through which he recognizes the property of the lender.
• No special capacity is required to enter into this contract, the general capacity to contract is sufficient .

Disadvantages

Just as it has advantages, it also has some disadvantages which we will mention below.

• It is free of charge , so no financial remuneration is received .
• The borrower acquires only and exclusively the simple use of the thing loaned during a set period of time.
• If the thing loaned produces fruits , the borrower does not acquire ownership of the fruits, it being permissible, however, to use them.
• It must be liable for the damages suffered by the borrower for the defects of the thing loaned that the lender knew and did not make known.

Sample model

Some examples of a loan agreement are the following:

• Purchase of drinks with returnable containers
• Internet service contracts and the provider grants the modem as a loan.
• Rental of houses or cars.