What Is Gratuitous Loan Agreement

The parties to the loan agreement are the lender and the borrower. Under section 690, paragraph 1, of the GK, the owner or any other person authorized by law may be the owner or owner. In accordance with art. 689 ABs. 1 ZK under a free use contract (loan contract), one party (the lender) agrees to transfer or transfer the thing to the other (beneficiary of the loan) for free temporary use, which undertakes to return the same thing in the state in which it received it, taking into account normal wear or in a condition defined by the contract. The borrower is required to use the thing entrusted to him for free use in accordance with the terms of the contract and, if these conditions are not stipulated in the contract, it is in accordance with the purpose of the case. In the event of a breach of this obligation, the lender has the right to seek termination of the contract and damages (paragraphs 1, 3, s. 615, s. 689 BGB). For the reasons covered by Section 698 GK, it is possible to terminate the term loan agreement prematurely.

Given the similarity of leases and loans to the loan agreement, many lease rules are applied (Article 689, paragraph 2, BGB). The purpose of the loan agreement can be defined individually and not consumable, both furniture and real estate. Since the use of the property is free under a loan agreement, the fruits and proceeds of the thing transferred to the loan belong to the lender as the owner of the business. However, the parties` contract may provide for something else. If the loan contract for the borrower is terminated, it is mandatory to return this thing. The thing must be returned to the lender in the state in which it was received to use it, taking into account normal wear or in a condition determined by the loan agreement. The lender`s primary responsibility is to provide the loan to the borrower in a condition consistent with the terms of the contract and its purpose (Article 691, paragraph 1, of the Civil Code). With regard to the composition of the subjects, consensual loan contracts are bilateral, but they have no signs of reciprocity, as the lender`s obligations to transfer something to free use do not conform to the borrower`s right to require such a transfer. Due to the unpaid nature of the loan agreement, if the borrower does not meet the obligation to use it free of charge, he is not entitled to take the matter in kind, but has the right to claim only the termination of the contract and the actual harm he suffered (s. 692 BGB).

A waiver of a loan agreement concluded without delay is possible at any time. Refusal to consider this contract is required to notify the other party for one month if the contract does not provide for further notice. If the loan agreement is concluded with an indication of the validity term, only the borrower has the right to refuse the contract with that termination, unless the loan agreement is otherwise provided (Article 699 BGB). A loan agreement can be either consensual and real. An out-of-court loan agreement is entered into when the contractual terms are the obligation for the lender to transfer the business to free use from the date of its conclusion.