Loan in the Philippines – Monetary Obligation
Just like any other contracts, a contract of loan is perfected when there is a meeting of the minds between the first party and the second party; however, it only becomes consummated when the personal property is delivered by first party to the second party.
So, for example, if Juan borrows money in the amount of P1,000.00 from John and John agrees, then the contract of loan is perfected. But it is only when John gives P1,000.00 to Juan that the contract of loan is consummated. So once it is consummated, John becomes obliged to deliver the amount to Juan. Juan, on the other hand, is obliged to return the same amount of money to John on the date agreed upon.
Contracting loan in the Philippines is very easy; it is the observance of the terms of the contract that makes it confusing and legally problematic. So, in drafting a contract of loan, lawyer’s advice may be important to make sure that the terms of the contract are lawful and nt oppressive to any of the parties.