Borrowing money is a regular activity that takes place between subjects in life. When participating in borrowing activities, subjects often enter into loan contracts to determine the rights and obligations between the borrower and the lender. To help readers learn more about this common type of contract, in this article, TNTP will present the basic content you need to know about loan contracts.
1. What is a loan contract?
The law does not have specific regulations on loan contracts. According to Clause 1, Article 105 of the Civil Code 2015, money is also a type of property, thus, a loan contract can be considered a specific form of contract for a loan of property according to the provisions of Section 4, Chapter XVI Civil Code 2015.
Specifically, according to Article 463 of the Civil Code 2015, a contract for the loan of property means an agreement between parties whereby a lender delivers property to a borrower. When the loan falls due, the borrower must repay the lender property of the same type in accordance with the correct quantity and quality and must pay interest if so agreed or so provided by law.
Thus, it can be understood that the loan contract is a type of contract under which the lender will lend the borrower an amount of money; the borrower can use that money for purposes by the content agreed in the contract within a certain period. At the end of the loan term, the borrower must repay the money to the lender and also pay an interest rate to the lender if the parties agree.
2. Form of loan contract
The law does not stipulate that loan contracts must be made in writing. Therefore, a loan contract can be expressed verbally, in writing or through specific acts. However, to minimize the risk of disputes, the parties should still enter into a written contract.
In addition, the law does not require loan contracts to be notarised or authenticated. However, if the parties to the contract are individuals, the contract should be notarised or authenticated to make it easier to resolve disputes in a court of law.
3. Language of the loan contract
The loan contract can be written in Vietnamese, or Vietnamese and a foreign language. If it is a bilingual contract, the parties need to agree in the contract on the preferred language when there is a difference between the two languages for the following reasons:
– When carrying out administrative procedures and needing to submit a contract, the contract must be made in Vietnamese because the language used in Vietnam’s administrative procedure documents is required to be Vietnamese.
– When there is a dispute about contract performance and the parties request a Court or Arbitration in Vietnam to resolve it, the adjudicating agencies will require the parties to translate the contract into Vietnamese.
Above is the article “Loan contract – Basic contents you need to know” that TNTP sends to readers. If there is a problem that needs to be discussed, please contact TNTP for support.