Gratuitous Use Agreement (Loan)
In accordance with paragraph 1 of Art. 689 CC under a contract of gratuitous use (loan agreement), one party (the lender) undertakes to transfer or transfer the thing for free temporary use to the other party (loan recipient), which undertakes to return the same thing in the condition in which it received it, taking into account normal wear and tear or in a condition determined by the contract.
A loan agreement can be either consensual, and real. A consensual loan agreement takes place when, conditions of the contract, the lender's obligation to transfer the thing for free use arises from the moment of its conclusion. In the absence of such a condition, the loan contract is deemed to be concluded from the moment of transfer of the thing to gratuitous use, i.е. it is a real contract.
In terms of subject composition, consensual loan agreements are bilateral, but they do not have a sign of reciprocity, because the lender's obligations to transfer a thing for free use do not correspond to the right of the borrower to demand such transfer. Due to the unpaid nature of the loan agreement, if the lender fails to fulfill the obligation to provide the thing for free use, the borrower does not have the right to take delivery of the thing in kind, but has the right to demand only the termination of the contract and compensation for actual damage suffered by him (Article 692 of the Civil Code).
Bilateral nature of a real loan agreement is expressed in the presence of both sides of different rights and obligations. Thus, in addition to rights, the lender also has the responsibility to answer for the defects of the thing transferred to gratuitous use (Article 693 of the Civil Code), and for damage to third parties resulting from the use of the thing (Article 697 of the Civil Code).
The parties in the loan agreement are the lender and the borrower. According to paragraph 1 of Art. 690 GK lender may be the owner or other person authorized by law or the owner.
The law does not specify who can be a borrower, , therefore, they can be any person. However, there are exceptions. So, a commercial organization has no right to transfer property for gratuitous use to a person who is its founder, participant, leader, a member of its management or control bodies (paragraph 2 of Article 690 of the Civil Code).
The subject of the loan agreement can be individually-defined and non-consumable items, both movable and immovable.
In the loan agreement, data should be specified that allow you to determine definitely the property that is to be transferred to the borrower as a object of use. In the absence of such data in the contract, the condition of the object to be transferred , is considered not agreed by the parties, and the contract of gratuitous use is not considered to be concluded. Documentary evidence of the data that makes it possible to identify the subject of the loan must be the same as when signing a lease.
Since the use of property under a loan agreement is free of charge, the fruits and proceeds from the thing transferred to the loan belong to the lender as the owner of the thing. However, the contract of the parties may provide otherwise.
The form of the loan agreement must comply with the general rules on the form of transactions. In the sense of paragraph 1 of Art. 131 GK is necessary state registration transfer of immovable property for free use.
A loan agreement may be concluded for a certain period, and if the period in the contract is not stipulated, it is considered concluded for an indefinite period (clause 1, para 1, clause 2, clause 610 GK). In the latter case, the term of the contract is limited to the moment of demand for property by the person who provided it.
In view of the similarity of the lease and loan agreements to the loan agreement, many rules pertaining to the lease contract are applied (paragraph 2 of article 689 of the Civil Code).
The main responsibility of the lender is the provision of the loan to the borrower in a condition in accordance with the terms of the contract and its purpose (paragraph 1 of Article 691 of the Civil Code).
The obligation of the borrower to maintain the goods is the duty to support the thing received for free use, in good condition, including the implementation of current and /strong> , and bear all costs for its content, unless otherwise provided by the contract (Article 695 GK).
The borrower is obliged to use the thing transferred to him for gratuitous use in accordance with the terms of the contract, and if such conditions are not established in the contract, then in accordance with the purpose of the thing. In the event of a breach of this obligation, the lender has the right to demand the termination of the contract and compensation for damages (clauses 1, 3, article 615, clause 2, article 689 of the Civil Code).
A waiver of a loan agreement concluded without a period is possible at any time. The party refusing the contract is obliged to notify the other party about it one month, if the contract does not provide for another period of notice. If the loan agreement is concluded with an indication of the period of its validity, only the borrower has the right to refuse the contract with such notice, unless otherwise stipulated by the loan agreement (Article 699 of the Civil Code).
On the grounds specified in Art. 698 GK, an early termination of the loan agreement concluded for a certain period is possible.
If the borrower continues to use the thing after the expiry of the contract, in the absence of objections of the lender, the contract is considered renewed on the same conditions for an indefinite period (clause 2, article 621, clause 2, article 689 of the Civil Code).
When the loan agreement is terminated on the borrower, there is a duty to return this thing. The thing is to be returned to the lender in the condition in which he received it for use, taking into account normal wear and tear or in a condition determined by the loan agreement.
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