Legal Briefing In a weekly column, solicitor

Juliet Phillips-James

casts her expert eye over a range of legal matters and urges anyone with any questions or problems to come forward for help.

Q AI have loaned money to a friend/family member and they are refusing to give the money back – what can I do?

In order to retrieve your money, you will need to prove this was a loan and not a gift. There also needs to be sufficient evidence of a contract made where it was agreed the money would be repaid. The contract can be written or verbal. If the contract is verbal, the courts would need to see evidence of this such as text messages discussing the loan, evidence of you transferring the money to their account or evidence of repayments being made into your bank account.

In determining whether a contract has been formed, the court will look at four elements that create an enforceable contract:

Offer

Acceptance

Intention to create legal intentions Consideration

The first two elements would be satisfied as the money has been offered by you and accepted by the other party. Intention to create legal relations is what can prove difficult to satisfy.

In family arrangements, there is a presumption in law that the parties did not intend to create legal relations. This is because the law recognises these situations are comparable to that of a gift.

However, this presumption can be rebutted with evidence to the contrary. For example, if you and your family member drew up a written agreement relating to the loan and when the money should be paid back, this would be evidence that you intended to create a contact that was legally binding. Another example could be where a third party is involved in the agreement.

When lending money to friends or family, we would always advise you to put the agreement in writing. That way, if anything were to go wrong and you needed to seek legal advice to ensure the money is returned to you, you would be protected.

If you need advice on returning money owed to you or advice on putting an agreement in place before lending money, please do not hesitate to contact the Dispute Resolution Department.