A loan is a named contract that is regulated by the provisions of the Law on Obligations. The loan agreement obligates the lender to hand over to the borrower a certain amount of money or other exchangeable things, and the borrower is obliged to return the same amount of money, i.e. the same amount of things of the same type and of the same quality, after a certain time.
From the very definition of the loan agreement, it can be concluded that the object of the loan can be all replaceable things (grain, wheat, etc.). In practice, a contract on a loan of money is most often drawn up.
Depending on whether the borrower undertakes to return only the principal or to return the principal as well as the interest, there are differences between an interest-free loan and a loan with interest.
An interest-free loan is a charitable legal transaction where the borrower has the obligation to return only those things that he received.
In the case of a loan agreement with interest, the parties are obliged to foresee the obligation to repay the interest and the amount of the interest rate in the agreement itself. There is an exception to this rule if it concerns contracts in the economy. In those cases, the borrower owes interest even if it is not contracted.
This means that the loan agreement can be concluded between companies as well as between persons. A loan agreement can be concluded between the employer and the employee.
When it comes to the loan repayment period, it can be divided into short-term and long-term loan agreements.
The loan agreement does not have to be certified by a state authorities – a notary. Certainly, if the parties want to achieve a greater degree of legal certainty, it is recommended that the contractor’s signatures be certified by a competent notary.
In practice, it is not a rare case that the lender wants to secure his claim by establishing a lien on the property owned by the borrower. In that case, the borrower must provide a pledge statement establishing a mortgage in favor of the lender. The pledge statement must be certified by a notary.
The lender is obliged to hand over certain things at the agreed time, and if the deadline for handing over is not set, then when the borrower requests it. The borrower’s right to request the handover of certain items expires three months after the lender’s arrival in arrears, and in any case, one year after the conclusion of the contract.
If it turns out that the financial circumstances of the borrower are such that it is uncertain whether he will be able to repay the loan, the lender may refuse to fulfill his obligation to hand over the promised items, if he did not know this at the time of the conclusion of the contract, as well as if the deterioration of the borrower’s material conditions opportunity happened after the conclusion of the contract. However, he will be obliged to fulfill his obligation if the borrower or someone else provides sufficient security for him.
The lender is obliged to compensate the borrower for damages caused to him due to material defects of the borrowed items. If the loan was concluded without compensation ( interest ), he is obliged to compensate the damage only if the defects of the item were known to him or could not remain unknown to him, and he did not inform the borrower about them.
The borrower is obliged to return the same quantity of items, of the same type and quality, within the agreed period. If the contractors have not set a deadline for repaying the loan, nor can it be determined from the circumstances of the loan, the borrower is obliged to repay the loan at the end of a reasonable period, which cannot be shorter than two months, counting from the lender’s request to repay the loan.
If no money was given in the loan, and it was agreed that the borrower will return the loan in money, the borrower is nevertheless authorized to return the borrowed items or the amount of money corresponding to the value of those items at the time and place specified by the contract for return.
The borrower can withdraw from the contract before the lender hands over certain things, but if this causes any damage to the lender, he is obliged to compensate it. and compensate him for the damage.
If the contract specifies a purpose for which the borrower can use the borrowed money, and he uses it for some other purpose, the lender can declare that he is terminating the contract.