CONTRACTS FOR LOAN OF PROPERTY

I. Define

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.

 

II. Obligations of lenders, borrower

Lenders Borrower
Obligations 1. Deliver the property to the borrower in full, strictly in accordance with the quality and quantity, and at the time and place, agreed.

2. Compensate the borrower for any damage where the lender knows that the property is not of the agreed quality but fails to notify the borrower, unless the borrower accepts the property with knowledge that the property is not of the agreed quality.

3. Do not demand the borrower to return the property prior to the due date, except in the cases performance of contracts for fixed term loans or relevant laws.

 

 1. Where the property lent is a sum of money, the borrower must repay the lender the loan in full when due. If the property is an object, the borrower must deliver to the lender an object of the same type, quantity and quality, unless otherwise agreed.

2. Where a borrower is not able to deliver an object, it may, with the consent of the lender, repay the value of the borrowed object, in cash, as at the time and place of delivery.

3. The place for repayment of a loan shall be the place of residence or head office of the lender, unless otherwise agreed.

4. If a borrower fails to repay all or any instalment of an interest-free loan, in whole or in part, when payment falls due, the borrower must, if the parties so agree, pay interest on the overdue amount from the due date until the date on which payment is made, at the basic interest rate prescribed in Clause 2 Article 468 of Civil code (interest rate shall equal 50% of the maximum interest), unless otherwise agreed or otherwise prescribed by law.

5. If a borrower fails to repay, in whole or in part, a loan with interest, the borrower must pay:

a) Interest on the principal as agreed in proportion to the overdue loan term and interest at the rate prescribed in Clause 2 Article 468 of Civil code (interest rate shall equal 50% of the maximum interest) in case of late payment;

b) Overdue interest on the principal equals one hundred and fifty 150% of the interest rate in proportion to the late payment period, unless otherwise agreed.

 

 

III. The rate of interest

1. The rate of interest for a loan shall be as agreed by the parties.

1.1 The rate of interest for a loan agreed by the parties may not exceed 20% per year, unless otherwise prescribed by law.

1.2. If the agreed interest exceeds the maximum interest above, the agreed interest shall become invalid.

2. Where parties agree that interest will be payable but fail to specify the interest rate, or where there is a dispute as to the interest rate, the interest rate for the duration of the loan shall equal 50% of the maximum interest prescribed in Clause 1 of this Article at the repayment time.