Loan Explanations

The etymology of comodato refers us to the Latin word commodātum, which can be translated as “loan”. A loan is called a type of contract through which an object on loan is granted or received, which can be used without being damaged and then must be returned.

The loan is also known as a use loan. One of the parties to the contract delivers an asset to the other party for the latter to use until a certain time, when it must be returned.

In this type of contract, the lender is the one who gives an element to the borrower to use it for a certain period and then return it. It is important to bear in mind that, while the loan is being developed, the lender maintains ownership of the loaned object. This means that the domain and ownership are not transferred, regardless of the asset in question being used by the borrower.

According to DigoPaul, another relevant fact to consider is that the loan is a free contract: whoever receives the object does not pay for it. It is not, therefore, a rental. The borrower, in any case, has the obligation to return the loan in the same conditions in which he received it, otherwise he may be forced to pay a certain amount.

Take the case of a man who hires an Internet access service. The company charges you a certain monthly fee to provide the service, but gives you a modem on loan (free of charge). The user can use the modem while he is a company customer: if he chooses to stop contracting the service, he must return the modem.

Specific obligations of the borrower

The party that becomes the owner of the thing loaned throughout the duration of the loan agreement has a series of obligations well defined by law, which may be slightly different in each country. Taking the Spanish Code as a reference, they are:

* return the product once the loan period has concluded, as agreed in the loan agreement. It is important to point out that in exceptional cases, the lender can claim it before this point and the borrower must agree without opposing it;

* take charge of the expenses that become necessary to use and keep the thing loaned;

* not to give the thing borrowed a use that exceeds the limits of the contract. At this point, the goodwill of the borrower plays a primary role, since usually the other party cannot supervise the situation;

* Take care of the product from any type of deterioration or breakage, and also avoid lending it to a third party outside the contract, since at the time of return it must be in very good condition.

Specific obligations of the borrower

As in any contract, the loan agreement specifies obligations for each of the parties. However, since this is unilateral, those of the borrower are born from principles of justice, since they have an accidental or eventual nature:

* If the borrower needs to invest an extraordinary sum of money to preserve or repair the thing loaned, the borrower must deliver it to him. The condition, in an eventual case like this, is that the first one lets you know before making the expense, although if it is an emergency it is possible to ignore the notice without losing the right to a refund;

* Take charge of the damages that the borrower may suffer due to any problem caused by the thing loaned, provided that the reasons are in damages or risks that were of his prior knowledge and that he has not expressed them at the time of signing of the contract.