Signing the contract obliges us to comply with it – but what if it contains unfavorable provisions, formal errors or for some other reason we think that its whole or some parts should not be respected by us? When will the loan or loan agreement be invalid?

Does the loan agreement have to be in a documentary form?

We always agree with a bank or professional loan company in the form of a document, but in the case of a loan from family or friends, we may be tempted to save time and conclude it orally.

However, it should be pointed out that this can sometimes be risky. The fact that the borrower is close to us does not exclude a situation in which conflict will arise and you will have to go to court, and then the contract will be very valuable.

Also, not everyone is aware of the fact that there is a legal obligation, indicated in the Civil Code, to include private loans in the form of a document for an amount exceeding PLN 1,000 (although of course, if we wish to do so, we can also write down a contract for a loan for several hundred zlotys. ).

Document form should not be confused with the written form. Currently, when concluding a loan agreement via the Internet, we often do not receive a physical agreement to be signed, and we will confirm the will to incur liability, for example by a transfer for the amount of PLN 1. However, it is not illegal, as we will undoubtedly receive a contract in an electronic format in a documentary form.

When will the loan or loan agreement be invalid?

Cancellation of all or part of a loan or credit agreement is possible for many reasons. We must remember that even the fact that we consciously agreed to something does not mean that it is binding. The law protects us in many ways not only against fraud and manipulation but also against our naivety or lack of financial knowledge. The reasons for contesting the contract may include:

  • establishment of collateral disproportionate to the amount of the debt (for example, a mortgage on an apartment in the case of a loan of PLN 5,000);
  • inclusion of illegal provisions in the contract (for example, a provision with interest higher than the maximum statutory interest);
  • formal errors (lack of personal data of both parties, signatures);
  • lack of consent of a third party who would be responsible for the repayment of the loan or loan (i.e. taking a loan by a married person with an established joint property without the consent of the spouse).

Interestingly, we do not have to raise any of these arguments ourselves to challenge all or part of the contract. For example, if we go to court for another reason related to the loan in question, such as a default, the issue of invalid entries may still be raised.

Can an incapacitated person take a loan or a loan?

We can talk in Poland about total or partial incapacitation. The first one means a complete limitation of legal capacity. Legal action may be, inter alia, donating, or taking out a loan or a loan.

A completely incapacitated person cannot do these things, and even if this happens, any documents or provisions resulting from it will be invalid. At the same time, it must be pointed out that every incapacitated person has a legal guardian who can legally act on their behalf.

The situation is slightly different in the case of partial incapacitation. It allows you to maintain a certain ability to act but to take serious decisions, such as taking a loan or credit, and so will require the consent of the trustee appointed by the court. Otherwise, they will also be invalid.

As you can see, in any case, the loan or credit taken by an incapacitated person will be invalid. This can be compared to a situation where a bank or loan company would grant a loan to an 8-year-old (without legal capacity) or a 14-year-old (with partial legal capacity).

The invalidity of the contract means that the liabilities do not have to be repaid following the terms specified in the contract, but of course, the borrowed funds must be returned if they have already been paid. In addition to having to return the borrowed capital, you will also need to pay interest in keeping the lender’s funds for a while. We do not have to worry about any financial penalties for this.

Why should we read credit and loan agreements?

Although some provisions of the loan or loan agreement, which are unfavorable for us, can be canceled, this is not always the case. Certain provisions regarding the number of fees, security, or rules related to the termination of the contract may be unprofitable, but at the same time completely legal and impossible to challenge. Therefore, it is imperative to read credit and loan agreements, and not count on the fact that the contract can be canceled if necessary.

When the loan or credit agreement is invalid – summary

As you can see, contrary to appearances, taking a loan or a loan does not necessarily mean that we will have to pay them back by the provisions of the contract (although in any case, if we have already received any funds, we will have to return them). Illegal, unfair, or erroneous provisions may cause the whole or part of the contract to be invalidated.

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