Loan: what are the rules that characterize this type of contract?

Brazilian legislation provides for a modality of loan, without the consideration of a financial amount. The loan, as it is called, is the type of loan in which one person gives to another, free of charge, an immovable or movable property, provided that it is infungible, that is, an asset that, due to its individual characteristics, cannot be exchanged for another of the same kind.

Although it is an informal type of loan, which does not even require a written form for its validity, it is recommended that, depending on the type of asset involved in the loan, a written contract be formalized, establishing the terms and conditions for the use and storage of the property.

In this article, we will explain in more detail what a loan agreement is and how to formalize this type of loan.

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The loan agreement

The loan agreement is provided for in articles 579 to 585 of the Brazilian Civil Code and is concluded between two figures: Commodant, Who is the person who undertakes the good, and the borrower, who is the person who borrows the thing.

As a rule, the asset, the object of the loan, must be an infungible asset, that is, it cannot be replaced by others of the same kind. However, it is possible to find in the doctrine the possibility of concluding loan contracts having as their object fungible assets (which can be replaced by others of the same kind), but which, by agreement between the parties, this asset ends up changing its nature to an infungible asset. A collection of stamps or comic books, for example, may fall under these types of goods.

What are the characteristics of the loan?

The loan has specific characteristics to configure: it must be a one-sided, free, real, temporary and very personal contract. We will explain each of these characteristics below:

Very personal contract

The loan is based on the trust, or trust that the landlord has in the borrower, since it is generally concluded because of the personal characteristics of the borrower. That is why it is considered a contract Personal intuition or very personal.

In this sense, the landlord lends an asset to the borrower so that he can take advantage of. The loan, in order to be transferred to a third party, requires the express authorization of the landlord.

In the same vein, Article 580 of the Civil Code limits the possibility of guardians, trustees and, in general, all managers of other people's property, to borrow, without special authorization, the assets entrusted to their custody.

Gratuity

The loan also has the characteristic of non-burdency, that is, it is a contract for the free loan of an asset to be used for a certain time and then returned. The charge for the use of the property, on the other hand, would transform the agreement into a rental agreement, which has different and specific rules.

In the same way, the borrower cannot charge the landlord any expenses related to the use and custody of the property, the subject of the loan, as stipulated in article 584 of the Civil Code:

Art. 584. The borrower may never recover from the landlord the expenses incurred with the use and enjoyment of the loaned thing.

Real contract

This characteristic derives from the fact that this contract will only be configured with the delivery of the thing by the landlord to the tenant. That is, it is necessary for the owner of the property to want to borrow it and hand it over to the beneficiary who must receive it. Thus, in the legal world, we say that contracts only become perfect with tradition.

Unilaterality

The loan is considered a one-sided contract, since only the borrower has obligations. He must take care of the property as if it were his own and cannot use it for any purpose other than that established in the contract. In addition, you must repay the loaned thing at the end of the term of the contract.

Failure to comply with any of these obligations may result in contractual termination, without prejudice to the attribution of payment of losses and damages to the borrower.

Deadline

The loan agreement is a temporary contract, fixed with a fixed term. However, if the term has not been established in the contract, it will be assumed that its term is the one necessary for the use for which the loan was granted.

In any case, the landlord will not be allowed to return the property before the due deadline, unless there is an urgent and unforeseen need, which must be recognized in court, under penalty of the payment of losses and damages that the borrower may suffer.

But what about when the borrower doesn't return the thing on time? In these cases, the debtor's automatic default is constituted, in accordance with Article 397 of the Civil Code. It is also up to the creditor to file a repossession action.

For contracts that do not have a defined deadline, it is necessary that, after the use of the asset, the landlord notifies the borrower so that he can return it.

It so happens that defining the deadline necessary for the use of the granted asset is not an easy task and not always intuitive. For this reason, the case law of the Superior Court of Justice is not peaceful regarding the possibility of requesting the return of the property loaned by mere notification of the lessor.

However, one way out to resolve this issue is to apply the provisions of article 473 of the Civil Code, which provides:

Art. 473. Unilateral resilience, in cases where the law expressly or implicitly allows it, operates upon a complaint notified to the other party.

Single paragraph. If, however, given the nature of the contract, one of the parties has made significant investments for its execution, the unilateral complaint will only take effect after a period compatible with the nature and size of the investments has elapsed.

Thus, the notification could be considered sufficient to close the loan, unless the borrower has made significant investments for the use and custody of the property. In such cases, the termination of the contract could be delayed.

What happens if the property is not returned on time?

When the asset, the subject of the loan, is not returned within the agreed period, the automatic default provided for in article 397 of the Civil Code is constituted. The consequence of the default is that the borrower must pay rent to the landlord until the property is returned, in accordance with article 582, also of the Civil Code.

But note that, even if the borrower is obliged to pay rent to the landlord, when the default is set up, this payment has the nature of a penalty, and it cannot be said that there was a conversion of the loan agreement into a rental agreement. This is because the purpose of imposing this burden on the borrower is to compel him to fulfill his part of the agreement and return the property that was not returned on the due date.

At the same time, it is important to emphasize that the amount of this rent penalty cannot be imposed in such a large amount that it will be considered abusive. Arbitrated rent for a penalty greater than twice the market average is considered abusive, as established in the decision issued in ResP 1,175,848/PR, by the rapporteur of the Min. Paulo de Tarso Sanseverino, at trial on September 18, 2012.

Improvements

Another question that arises in relation to the loan relates to the treatment given to the improvements made by the borrower to the asset loaned.

According to article 584 of the Civil Code, the borrower cannot charge the landlord for the expenses incurred with the use and enjoyment of the loaned thing. However, this understanding is not peaceful in the case law.

It appears that in some cases, the provisions of article 1,219 of the Civil Code have been applied, allowing the borrower to be compensated for the improvements made to the property, whether necessary - those whose purpose is the conservation of the property - and/or useful, carried out to allow or facilitate the use of the property.

Regarding voluntary improvements - those that value the property, that create a luxury/embellishment - they could be lifted by the borrower, as long as their removal does not damage the property.

For this reason, the ideal is that such matter should be expressly provided for in a contract, since such devices are considered valid and effective.

Responsibility

The Civil Code, in its article 585, establishes that if two or more people receive the property on loan, everyone will be jointly and severally liable for the obligations assumed before the landlord. This means that if the thing is damaged or lost due to the fault of one of the borrowers, all other borrowers will be responsible for refunding the value of the property. However, under article 279, also of the Civil Code, only the guilty borrower is responsible for losses and damages.

Art. 279. If the provision is impossible due to the fault of one of the joint and several debtors, the burden of paying the equivalent remains for all; but only the guilty party is responsible for losses and damages.

Convenience, security, and legal validity of electronically signed loan agreements

As seen, the loan agreement has specific characteristics that protect the parties by regulating aspects that are not clear or provided for by law. Therefore, it is important that the contract be formalized, removing doubts about the understanding between the Parties.

Thus, when drafting the loan agreement, it is important to provide for:

• The description of the asset, the subject of the loan;
• The purpose of using the property;
• Deadline for the return of the property;
• The amount of the rent penalty, if the property is not returned on the due date;
• Conditions of conservation of the property on the date of its return;
• Treatment given to improvements made to the property, whether useful, necessary and/or voluntary;
• Other aspects and conditions for the use of the property.

Nowadays, the conclusion of contracts has become even more agile, secure and convenient with the use of digital signatures.

The loan agreement is no different. It can be signed with any type of electronic signature, be it simple (with simplified methods for authenticating signers, such as Token, machine IP and geolocation), advanced (with more sophisticated methods capable of uniquely identifying the signer, such as pix, biometrics, Selfie with document and/or the combination of several authentication methods) or qualified (with the use of a digital certificate).

It is only necessary to guarantee that in the case of lending real estate, when there is an interest in registering the loan upon registration of the property, then there is a need to sign the contract with digital certificate issued by ICP-Brazil.

At Clicksign, it is possible for the user to sign the loan agreement with any type of subscription, from simple to advanced, and qualified, using their digital certificate.

In addition, after the advent of Law 14,620 of 2023, which included paragraph 4, in article 784, of the Code of Civil Procedure, there is no doubt about the validity of electronically signed documents, when their integrity is verified by a signature provider.

Learn about Clicksign's electronic signature solutions! Take a free trial, no credit card required.