A lesson we all have to learn at some stage is that you can’t always expect money to be paid back if you loan it out.
Of course, the borrower should always do their utmost to keep their end of the bargain, but ultimately, it would be wise to lend an amount that you can afford to lose, or otherwise, nothing at all.
A family loan situation that has just wrapped up in the Free State high court is a case in point.
A mother and a father loaned their daughter a whopping R540 000 to help her through an issue that popped up during her divorce and ended up losing the court battle to get it paid back.
TimesLIVE reported that when the daughter was going through her divorce in 2018, she had asked her family to help pay an amount equal to half of the value of the home she shared with her husband, so as to buy him out.
The parents diligently forked out the money to help their daughter out of the stressful situation – with R300 000 paid by her father, and R240 000 paid by her mother – and had expected that she would pay it back once the dust had settled.
Since the daughter neglected to pay anything back, though, the family were forced to battle it out in court.
Unfortunately for the parents, because they merely hoped that the money would be paid back, they didn’t draw up an official loan agreement or contract to help them in the court of law.
Thus, unable to prove “the existence of either a written, oral, or tacit loan agreement”, the judge ruled in favour of the daughter:
The daughter admitted that she received the money but she argued that her parents failed to produce sufficient evidence to establish that when they gave her the money, she had any intention of repaying them.
…The action was dismissed with costs. According to the judgment, the father failed to prove the creation of contractual obligations and failed to prove the establishment of a contract from which rights may flow. The father also conceded during cross-examination that he and the daughter had not reached an agreement about a repayment date.
Judge AJ de Kock elaborated on the ruling by saying that “no prima facie evidence was presented to show that the money was advanced to and accepted by the daughter as a loan for consumption to be repaid”.
De Kock found the father “most certainly failed in proving the existence of a loan agreement containing a contractual term stipulating when the alleged amount was due and payable” by the daughter.
Even though the father pleaded in his claim that he gave his daughter the money “as a parent who was looking after the interests of his child” and had expected to be paid back, his claims were dismissed.
The lesson? Put pen to paper, folks.
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