Meaning of Lending (What it is, Concept and Definition)

Lending is a type of contract in which the free loan of things that cannot be replacedby another equal, like a property. The only obligation of the recipient is to return it within the agreed period and under the same conditions as received.

By law, the concept of lending is the loan of non-fungible goods. Fungible is a consumable good that can be exchanged for another exactly equal in value or quantity. The term is usually related to currency or agricultural commodities, for example. In other words, units of soy bags are fungible goods and can be exchanged in a mutual agreement, while a property is non-fungible and its loan regime is lending.

Whoever lends under the lending contract is the lender. And who receives is the borrower. The lending contract is understood by Brazilian law as a unilateral contract, where only the borrower has legal obligations. The provisions on lending are provided for in articles 579 and 585 of the Brazilian Civil Code.

The loan is considered a non-solemn contract, that is, it does not need to be registered in a notary office, and can be oral, or also called

verbal lending. But the recommendation is that it be done in writing to avoid misunderstandings.

O modal lending, or also called onerous lending, is when the loan has charges, that is, amounts to be paid. Which is a contradiction in the lending regime, which in its definition is understood as free. The subject is widely discussed in Civil Law, has no mention in the Civil Code and no unique understanding of jurists, being the subject of several jurisprudence, including the Supreme Court Federal.

One example common lending is the lending of cell phones by telephone operators. In these, the operators lend the device to companies, under a contract for business use, and the client company pays only for telephone and data consumption, being able to enjoy the device without costs.

The brewing industry also uses lending frequently, by lending freezers and refrigerators to bars so that they can offer their products in the establishment.

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