Lending money to a friend.

[Consumer dude]

Does lending money to a friend create a legal contract..

[Consumer dude]

Only if there is a written contract.

 

Thank you for your reply. He signed something towards the end of last year to confirm he owes me money. Does this confirm anything.

[Consumer dude]

If it was notarized or witnessed. There may be some legality if you and he both signed it, but im not too clued up in that regard. Thats why it is always a good idea to get independent witnesses to sign and view it if its a large amount of money, or get a solicitor to agree it.

 

We both signed, but no other witness..

[Consumer dude]

The short answer is yes. Lending money to a friend will generally create a legally enforceable contract.

 

As long as the agreement is non-commercial, it falls outside Part V of the Consumer Credit Act 1974. This means you do not have need to have a written contract or a witness or anything else. Obviously if you have a written contract that helps you prove the debt in court.

 

If your friend tries to argue that the money was a gift then the law will help you. The general rule is that where money is paid the law will assume it was intended as a loan rather than a gift, unless there is evidence to the contrary. The only exception is where you have a very close family relationship (marriage or parent/child - friendship doesn't count). You can read about a case where this issue was discussed here: http://huddersfield.yorkshirelawyer.co.uk/tag/presumption-of-advancement/. As long as you can prove that the money was paid to your friend, it would be up to your friend to prove that it was a gift and not up to you to prove that it was a loan. It would be difficult for him to do this if he signed something acknowledging that he owes you money.

 

Thank you, your post was very helpful. The amount was lent over time and not as one lump sum. I am due to phone him today to discuss the issue..

 

No answer when I phoned. I left a message the other day as well but he not replied.I don't think his wife knows about the money I lent. I could always tell her if he doesn't make contact. What do others think ?

[Consumer dude]

I would keep it between you and him. First thing to do now, is write a formal letter to him detailing the issue and for him to make contact with you. If he doesnt reply within 7/14/21 days, let him know you will not hesitate to make a claim against him.

 

I am grateful for your advice. I think your right. I don't however want to make it worse, the problem might be is if I send a letter to him, his wife might get to the letter before him and might even open the letter and possibly will question him so much as they have a relationship that is often strained to say the least. He is often weak in his decisions and will often lean on others. I will somehow meet up with him and will continue this week to try to contact him by phone. Many thanks..

 

Have just spoke to the wife. Just said ask him to phone me..

[Consumer dude]

He has phoned me. Talk is of a meet up to discuss the issue in hand..

[Consumer dude]

Meeting with friend and his wife to hopefully come to an agreement about paying me back. He had given me his credit card to off set what he was owning me but he has stopped the use of that now. Am I now entitled to demand the full amount with immediate effect..

[Consumer dude]

Thats up for you to decide. Read what you wrote again. He gave you payment on the CC, then stopped. Somethings not quite right here. I know he;s your friend, but if you really want the amount back, you need to speak to a mediator, or go through small claims. You've given him plenty of chances, so he would only have himself to blame.

 

What he had owed me, there was an arrangement of sort to use his credit card to reduce the amount slowly. His wife found out and the card was blocked so was no longer able to use that method. There is no question he owes me the money. I will see how the meet up goes which is planned for this weekend..

 

We had a meeting yesterday, that was the guy and his wife. She was accusing me of all sorts of things which I allowed her to rant. What I have is a signature from my friend to confirm the amount he owes me at the end of December 2012. I will give a grace period and then send an invoice to him for what I can show he owes me. Could I demand the full amount now payable, say within 28 days ? Does that sound reasonable ? I am infact willing to agreed a longer period, say six months to settle the loan providing he comes to a formal agreement. What do others think ?

 

How should I serve an invoice and be satisfied that this has been served without there being any misunderstanding..

[Consumer dude]

" I am in fact willing to agreed a longer period, say six months to settle the loan providing he comes to a formal agreement. What do others think ?"

 

 

Depends on the amount and if he is willing to adhere to further payment plan CD.

 

Regards

 

Andy

 

Thanks for your reply. The amount is just over five thousand. I definitely am seeking confirmation from the guy that he owes me the money and then I would consider a formal payment plan over a longer period. Does that sound reasonable ?

[Consumer dude]

how could I serve an invoice and any other correspondence to be sure of service. I don't think a recorded delivery will be signed for if I choose that method..

[Consumer dude]

Special Delivery - Process Server ?

 

I am aware of special delivery but what is process server ? My point is if a period refuses to sign on delivery..

[Consumer dude]

I will send an invoice and a copy of what was signed as owning. Could I demand full payment within 28 days ?

[Consumer dude]

Just sent statement/invoice for full amount payable within 28 days. This is going to put the cat amongst the pigeons but its a huge amount..

[Consumer dude]

how long does it take for a recorded delivery to show up as delivered online ?

[Consumer dude]

Sent the recorded deliver on 28/Feb. No signature is showing online. From experience, this is either No one answered the door or it was refused. If this happens a P739 (I think it is) is left. If no one responds to the card, will the mail be returned to me and if so will the post office give a reason ?

[Consumer dude]

Does anyone know how to get a telephone number of a royal mail delivery office. Not getting any luck online..

[Consumer dude]

I further enquired in a post office if mail would be returned to me. If the guy refused to sign for it and that reason was given on its return, would I then be able to state in a court that am attempt was made to communicate but my post was ignored. In an effect could it be said to be delivered even though it wasn't..

[Consumer dude]

If it isnt returned to you then it is deemed delivered. You have a receipt that proves you sent it.

 

Unfortunately letters dont always get signed for when sent RD - I had one popped through my letter box today. It is very kind of the Postman to do this especially as it was an item ordered that I was waiting on. However, it is risky for them because I could have said I didnt receive it !!

 

The guy in the postoffice said it could take three to four weeks to be returned which sounds a long time. If the person that it was intended never signs for it, then can it be assumed that it was delivered and the reason it wasn't was because it required a signature..

 

Phoned up customer services of post office. (wot a joke) RD has not been signed for, couldn't tell me if am attempt had be made to deliver. Looks lose another RD has been lost in the system. Its useless..

[Consumer dude]

I have found the quickest way to discover if an RD letter has been delivered is to put in a claim for the cost of the RD postage, along with a claim for the envelope/paper and time to construct your letter and the time taken to go to the post office.

 

You can download a claim form from their website or pick up one at the post office.

 

That's a very good idea..

[Consumer dude]

RD was delivered but not signed for. A breach of contract by royal mail ?

[Consumer dude]

Who says it was delivered ? The Post office? - if no signature, how can they say it was actually delivered ?

 

My friend confirmed it had been delivered..

[Consumer dude]

If you know for a fact that it has been delivered I would not be worrying too much about the proof of the delivery. If you have retained a copy of the letter and your Royal Mail receipt indicating you send it recorded then I think that is more than enough for court purposes. The CPR only requires first class post for service of court documents, not recorded. If there is any doubt then just send the letter again.

 

If you know he has seen the letter you have to think about what you do next. I guess you can either try to contact him to chat about, or send a proper letter before action and follow up with court proceedings if necessary.

 

If he did not repay you for the wedding that is almost certainly statute barred (in England and Wales you have 6 years to pursue a debt, after that it is not legally recoverable).

 

Assume your post was aimed at Mike770..

[Consumer dude]

Update on the lending of money to a friend. End of December 2012 he signed to confirm he owed me the amount of £5600.00. I sent a statement to that affect at the end of February 2013 requesting payment within 28 days. No arrangement has been made yet. What should I do now. Could I send something for him to sign to pay in installments and could I then charge interest ? I need to go on to the next step. What is the best route. I have tried to remain friendly but if he's not making an effort to communicate, what is the next move ?

[Consumer dude]

bit like the wedding I paid for (borrowed off partner then) for a friend, went to get the money as he was beingpaid on the following Monday by ex employer and he had done a runner with his new bride including our cooker etc for which he was buying off us and other furniture. and had been paid etc on the previous friday.

 

how's your situation now then.

[Consumer dude]

That happened back in the mid 80s. so no partner from then.

 

Just relised that was long gone. Least I have time on my side..