LENDING MONEY WITHOUT A WRITTEN LOAN AGREEMENT – HOW TO CLAIM REPAYMENT IN CASE OF DISPUTE?

I. Are oral loan agreements legally valid

Article 463 of the Civil Code 2015 provides: “A loan contract is an agreement between the parties whereby the lender delivers property to the borrower; upon maturity, the borrower must return to the lender property of the same type in the correct quantity and quality, and must pay interest if so agreed or as prescribed by law.”

The Civil Code does not mandate that loan contracts be in writing, except for certain transactions under specialized laws. Therefore, loans made orally, via text messages, phone calls, or bank transfers remain legally valid if the agreement between the parties can be proven.

II. How to prove a loan without a written contract

Evidence in civil proceedings is not limited to written loan contracts. Pursuant to Article 93 of the Civil Procedure Code 2015, evidence includes any factual material submitted to the court during litigation. The lender may rely on:

• Text messages, Zalo, Facebook conversations acknowledging the debt.
• Bank transfer records with notes such as “loan,” “borrowed money,” or “advance.”
• Lawfully obtained audio recordings where the borrower admits the debt.
• Witness testimony regarding the loan transaction.

III. What if the borrower deliberately evades repayment

The lender should:

1. Collect and preserve all evidence (messages, recordings, bank statements, witness lists).
2. Issue a written demand for repayment (via text, email, postal service, or bailiff office).
3. File a lawsuit with the competent court under Article 186 of the Civil Procedure Code 2015.

IV. When does non-repayment constitute a criminal offense

Most cases of non-repayment are civil disputes. However, if the borrower engages in fraudulent conduct to appropriate assets or absconds after borrowing, criminal liability may arise under:

• Article 174 of the Penal Code 2015 (Fraudulent appropriation of property).
• Article 175 of the Penal Code 2015 (Abuse of trust to appropriate property).

V. Practical recommendations to mitigate risks

• Always execute a written loan agreement specifying borrower details, loan amount, repayment term, interest, and signatures.
• Prefer bank transfers over cash.
• Avoid lending solely based on trust.
• Observe the statute of limitations for initiating lawsuits (three years under Article 429 of the Civil Code 2015).

VI. Conclusion

Failure to execute a written loan agreement often leads to complex disputes. Nevertheless, lenders should not assume that “no written contract means losing everything.” The law recognizes various forms of evidence to safeguard legitimate rights. The key is to proactively preserve proof, conduct transparent transactions, and adopt safe lending practices, especially for substantial amounts.