Lots of legal information, but in small doses

PROVING THE EXISTENCE OF A VERBAL LOAN AGREEMENT

Categories:

External legal department, Business law, Franchising law, Civil and commercial litigation


Very often, people lend each other money and rely on nothing else except their word to ensure repayment. While this sometimes works, it obviously has its problems since, if something goes wrong, it becomes difficult to prove that the loan ever existed.

It is therefore useful to lend the money (or repay it) by way of an annotated cheque. If litigation ensues, the annotation will give the judge a hint as to the nature of the agreement between the parties.

Conversely, Courts have decided that the mere existence of a cheque with no annotations does not constitute proof (or even a commencement thereof) that a loan existed. It should also be noted that the same idea applies to other types of monetary agreement, not just to loans.

This is important because Québec evidentiary rules generally limit testimonial evidence to situations where at least a commencement of proof has been established by the plaintiff, to the satisfaction of the Court, that a given agreement exists between the parties.

It is also worth pointing out that while the above reflects (in our view) the current state of the law in Québec, courts have, in the past, also rendered contradictory decisions on this point. As with any legal matter, it will eventually come down to the specific facts of your case and the application of legal principles to those facts.

Me Harry Karavitis, Attorney at Law

Alepin Gauthier Avocats Inc.

Back to the list

Do you like this publication?


Contact us

Contact us

Laval

450 231-1277
3080, boul. Le Carrefour
Bureau 400
Laval Qc Canada H7T 2R5

Lasalle

514 364-3383

Montréal

514 335-3037

Fax

450 681-1476

Directions

Follow us