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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 88812
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I have a car that I will need to use in six months (possibly

Customer Question

I have a car that I will need to use in six months (possibly even a year), but until that time, I don't need to use. I am wanting to loan this car to a friend who is also a mechanic, in exchange for some work he will do on a separate vehicle. I want to put in writing that I will loan him the car, for 6 months at a time, not to exceed 54,00 miles usage on the odometer, and that he will be responsible for paying the insurance during this time.

Can you please tell me if there is anything legally wrong with doing this, and or if you see any other potential problems I should be aware of. Also can you tell me, if he were to be in an accident and found guilty for some amount that exceeded his coverage, would I then be liable? And/or would I be liable anyway in any other way (parking tickets etc.)?
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you again.

This type of contract is fine and is legal. The problems you run into is that if there is an accident you can be held liable for excess damages, which is why you need to insist on an insurance policy with limits that would prevent an excess judgment. Typically $500K or $300K limits are sufficient for most all actions.

You would be liable for any parking tickets as the owner of the car, since those go to your license. The only way to avoid that would be to transfer the car over to him so he can put it into his name, which is not really what you want to do here. The contract that you would have, of course, would contain a statement that he would indemnify you for the fines and any excess judgments, but that would still not help you being liable initially and would mean you would have to sue him if he does not pay to reimburse you or indemnify you and then if he goes bankrupt you would be liable for the payments without any recourse against him.

This is why you do not see this done very often.



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Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 88812
Experience: All corporate law, including non-profits and charitable fraternal organizations.
Law Educator, Esq. and 8 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you so much!! You don't need to respond to this ..and I will go right back in and Accept your answer! This was just the only way I knew to leave you a note to say thank you for always giving such awesome, to the point, very informative, and very thorough answers!


 


Also, everything you have written as your standard information (above the rating), is very informative and helpful!


 


Long ago I took a business law class in Jr College, and even though it was only at that level, I knew for SURE that for ever more, I would be impressed with lawyers, even MORE with BUSINESS lawyers!! It is just INCREDIBLE what you have had to go through and learn to be what you are! And SOOO impressive that you did it!


 


Thanks again for your great answers!

Expert:  Law Educator, Esq. replied 1 year ago.
Thank you so much for your kind words.

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