Challenging a loan agreement: when and how it is possible

A loan agreement is a contract under which one party (the lender) transfers money or items specified by generic characteristics to the other party (the borrower), and the borrower undertakes to return them. According to Article 1046 of the Civil Code of Ukraine (CCU), such an agreement is considered concluded from the moment of the actual transfer of funds or items.

However, there are situations when the borrower has signed an agreement or receipt but has not actually received the money or items. In such cases, the law provides for the right to contest such an agreement.

On what grounds can a loan agreement be challenged?

According to Article 1051 of the Civil Code of Ukraine, the borrower has the right to go to court if:

• he did not receive any money or items from the lender;
• he received less than the amount specified in the contract.

This means that even if you have a signed agreement or receipt, you can prove that the actual transfer of money or property did not take place, or did not take place in full.

How does this work in practice?

A loan agreement can only be contested in court. The borrower must file a lawsuit and provide evidence to support their claims. This may include documents, correspondence, receipts, or other materials confirming that the funds or items were not transferred.

Important to remember:

• a loan agreement must be in writing if the amount exceeds ten non-taxable minimum incomes (Article 1047 of the Civil Code);
• a signed receipt or agreement in itself confirms the transfer of money, so the borrower will have to prove otherwise;
• witness testimony cannot be the main evidence in court if the agreement is in writing. Exceptions are cases where the agreement was signed under the influence of fraud, violence, malicious collusion, or severe circumstances.

What is important for the borrower to know?

A loan agreement is considered concluded only from the moment of actual transfer of money or items. If there was no transfer, the agreement may be considered not concluded.

• If you signed a receipt but did not receive the money, it is important to immediately collect evidence of this fact.
• The agreement must be contested as soon as possible so that the circumstances at the time of signing can be proven in court.

Contesting a loan agreement is a real way to protect your rights when money or items have not actually been received. The law gives the borrower the opportunity to prove such circumstances in court, but this requires the preparation of appropriate evidence.

Therefore, when signing any loan documents, you should be as careful as possible: check the actual transfer of funds, request confirmation of the transaction, and keep all documents. And if you find yourself in a situation where the signed agreement does not correspond to reality, you should contact a lawyer and defend your rights in accordance with Article 1051 of the Civil Code of Ukraine.