Civil Code > TITLE XVII. CONTRACTS FOR THE CUSTODY, USE OR POSSESSION OF CHATTELS 5

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Chapter 3. Loan for Use, or Free Loan

Art. 2767 – Definition.

A loan for use, or free loan, is a contract whereby one party, the lender, undertakes to transfer a chattel to the other party, the borrower, for gratuitous use.

Art. 2768 – Gratuitousness of the contract.

(1) The fee loan is essentially gratuitous.

(2) Where it is stipulated that the ‘lender shall receive a remuneration, the rules of contracts of letting and hiring shall apply.

Art. 2769 – Ownership of chattel.

(1) the lender shall retain the ownership of the chattel loaned.

(2) The borrower shall return the chattel to the lender on the termination of the contract.

Art. 2770 – Upkeep of chattel.

(1) The borrower shall maintain the chattel.

(2) The cost of upkeep shall be borne by the borrower.

Art. 2771 – use of chattel.

(1) The borrower may use the chattel loaned only for the purpose defined in the contract or, failing such stipulation, for a purpose in keeping with its nature.

(2) He may not allow a third party to make use of the chattel without the lender’s consent.

Art. 2772 – Return of chattel.

(1) The borrower shall return the chattel at the agreed time.

(2) Where no time has been agreed and the use for which the chattel has been lent itself implies no such time, the borrower shall return the chattel immediately at the lender’s request.

Art. 2773 – Premature return. – 1. Borrower’s right.

The borrower may return the chattel before the agreed time unless such return causes damage to the lender.

Art. 2774 – 2. Lender’s right.

The lender may claim the return of the chattel before the time at which is should normally have been returned where the borrower makes an uncovenanted use thereof, deteriorates it or allows a third party to make use of it or where the lender himself is in urgent and unforeseen need of it.

Art. 2775 – Death of borrower.

Where the borrower dies, the lender may require his heirs to return the chattel to him immediately, notwithstanding that he had agreed to lend it to the borrower for a fixed term.

Art. 2776 – Wrongful use.

(1) The borrower shall be liable for the loss or deterioration of the chattel, even due to force majeure, where he puts the object to an unauthorized use or improperly allows a third party to make use of it.

(2) In such case, he shall not be released from his liability unless he can prove that the chattel would have been lost or deteriorated, had he not violated his obligation.

Art. 2777- Avoidable loss.

The borrower shall be liable for the loss of the chattel through force majeure where he could have averted the loss by using a chattel of his own or, being unable to save both his own chattel and that lent to him, chose to save his own.

Art. 2778 – Contractual valuation.

Where the chattel was valued on the making of the contract, the borrower shall be liable for its loss in all cases.

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