I was recently asked how to go about getting repayment for money someone loaned to a friend. I want to preface this by saying that I am not an attorney nor do I give legal advice. I will go over what I know needs to be in place for a verbal agreement or oral contract to be valid.
There must be Offer and Acceptance. That means that an offer is made by one party to lend money and the acceptance is made by another party who agrees to repay the money.
There must be Lawful Purpose. This means that the purpose of the loan must be lawful. You could lend your friend money to pay their bills, but not, for example, to steal a car.
There must be Lawful Consideration. There must be an exchange of value between you and your friend and it must be legal, like money. It can’t be substituted with anything illegal like illegal drugs.
There must be Certainty of Terms. The terms of your contract cannot be vague or misrepresented. They have to be clear in that a certain amount of money was loaned and is expected to be repaid in this time period.
There has to be Free Consent of Both Parties. Both you and your friend have to enter into the agreement in sound mind and body without coercion or being strongarmed.
If you have those five elements in place, you have a solid foundation to legally get your money back in the situation of a verbal agreement or oral contract.
If someone has anything I missed, please feel free to comment.