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Richard
Richard, Attorney
Category: Legal
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Experience:  Attorney with 29 years of experience.
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In Pennsylvania, are loans between two adults legally binding?

Customer Question

In Pennsylvania, are loans between two adults legally binding? There was no written contract, only a verbal agreement between myself and my ex fiances father. He is charging interest and the purpose of the loan was to help us consolidate debt so we could afford a wedding. After the split, he divided the loan between the two of us
Submitted: 8 months ago.
Category: Legal
Expert:  Richard replied 8 months ago.
Good morning. My name is ***** ***** I look forward to helping you. If the father can substantiate that he did advance this money and it was understood to be a loan rather than a gift, then the father would have the ability to enforce the verbal agreement. The lack of a written contract can be overcome by the concepts of promissory estoppel, detrimental reliance, and unjust enrichment. This situation arises when Person A relied upon the verbal agreement, Person A performed based on such reliance, and because Person B defaulted, such reliance is now to Person A's detriment. Where there is i) partial performance by Person A based upon the mutual promises, ii) Person A relied upon such promises to perform, iii) Person B's failure to perform would be to Person A's detriment, and iv) result in Person B being unjustly enriched, Person A can overcome the legal requirement that the agreement be in writing. If the father can satisfy his burden of proving the foregoing, there would be a binding verbal contract. Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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