1. Is a written contract mandatory for lending money?

Pursuant to Article 116 of the Civil Code 2015 regarding civil transactions: “A civil transaction is a contract or a unilateral legal act which gives rise to, changes or terminates civil rights and obligations.”

And according to Clause 1, Article 119 of the Civil Code 2015 regarding the forms of civil transactions:

– Civil transactions may be expressed orally, in writing, or through specific acts.

– Civil transactions through electronic means in the form of data messages as prescribed by the law on electronic transactions shall be considered written transactions.

On the other hand, Article 463 of the Civil Code 2015 also stipulates the property loan contract as follows: “A property loan contract is an agreement between parties whereby the lender delivers property to the borrower; when the loan falls due, the borrower must return property of the same type, quantity and quality to the lender, and must pay interest only if so agreed or provided by law.”

Thus, lending money is a civil transaction through a property loan contract. The law does not mandate that a property loan contract must be expressed in writing. Therefore, lending money does not strictly require written paperwork and can be established through oral agreement or specific acts.

2. Can money lent without paperwork be recovered?

As mentioned above, the law still recognizes and protects cases of lending money without written documents if other prescribed forms exist.

Although paperwork is not mandatory, not all loan cases are legal. According to Article 117 of the Civil Code 2015 regarding the conditions for the validity of civil transactions:

– A civil transaction shall be valid when it satisfies all of the following conditions:

• The participants in the transaction have the civil legal capacity and the capacity for civil acts appropriate to the established transaction;
• The participants in the transaction act entirely voluntarily;
• The purpose and content of the transaction do not violate prohibited provisions of the law and are not contrary to social ethics.

– The form of a civil transaction shall be a condition for its validity in cases where it is so provided by law.

Therefore, when the validity conditions of a civil transaction are met, lending money without paperwork remains legal, and the lender is fully entitled to demand repayment from the borrower.

3. How to handle debt recovery when lending money without paperwork?

Lending without paperwork demonstrates mutual trust, so parties can meet to renegotiate the debt repayment. In cases where the borrower intentionally refuses to cooperate, the lender may file a lawsuit in Court under Article 186 of the Civil Procedure Code 2015 regarding the right to initiate a lawsuit: “The right to initiate a lawsuit: Agencies, organizations and individuals have the right to initiate a lawsuit by themselves or through their legal representatives at a competent Court to request protection of their legitimate rights and interests.”

In this situation, evidence proving the existence of the loan transaction is required under Article 94 of the Civil Procedure Code 2015 regarding sources of evidence, including:

– Readable, audible, or visible materials, and electronic data; – Exhibits; – Testimonies of the involved parties; – Testimonies of witnesses; – Expert conclusions; – Minutes of on-site appraisal results; – Results of property pricing or appraisal; – Documents recording legal events or acts established by functional persons; – Notarized or authenticated documents; – Other sources prescribed by law.

Additionally, if the borrower absconds to avoid debt, they may be denounced for the crime of abuse of trust to appropriate property according to Clause 35, Article 1 of the Law on Amendments to the Penal Code 2017 as follows:

– Any person who commits one of the following acts to appropriate another person’s property valued from 4,000,000 VND to under 50,000,000 VND, or under 4,000,000 VND but has been administratively sanctioned for appropriation, or has a prior conviction for this crime or one of the crimes specified in Articles 168, 169, 170, 171, 172, 173, 174 and 290 of this Code, which has not been expunged, or the property is the primary means of livelihood for the victim and their family, shall be sentenced to non-custodial reform for up to 03 years or imprisonment from 06 months to 03 years:

• Borrowing, lending, or renting property or receiving property of another person through a contract and then using dishonest tricks or absconding to appropriate such property, or failing to return the property when it falls due despite having the conditions and ability to do so;
• Borrowing, lending, or renting property or receiving property of another person through a contract and using such property for illegal purposes resulting in the inability to return it.

– Any person committing the crime in one of the following cases shall be sentenced to imprisonment from 02 years to 07 years:

• Organized;
• Professional;
• Appropriating property valued from 50,000,000 VND to under 200,000,000 VND;
• Abusing positions or powers or in the name of agencies or organizations;
• Using deceitful methods;
• Adversely affecting security, order, or social safety;
• Dangerous recidivism.

– Appropriating property valued from 200,000,000 VND to under 500,000,000 VND shall be sentenced to imprisonment from 05 years to 12 years.

– Appropriating property valued from 50,000,000 VND or more shall be sentenced to imprisonment from 12 years to 20 years.

– Offenders may also be fined from 10,000,000 VND to 100,000,000 VND, prohibited from holding certain positions, practicing certain professions or doing certain jobs for 01 to 05 years, or have part or all of their property confiscated.

The settlement of civil matters in criminal cases will be conducted concurrently with the settlement of the criminal case according to Article 30 of the Criminal Procedure Code 2015: “The settlement of civil matters in criminal cases shall be conducted concurrently with the settlement of the criminal case. In cases where the criminal case involves compensation or restitution which cannot be proven yet and does not affect the settlement of the criminal case, the civil matter may be separated for settlement under civil procedure.”

In summary, if you lend money without paperwork and cannot recover it, you can initiate a lawsuit in Court. To sue, you must prove the loan through recordings of oral agreements or confirmation from the borrower via email, phone messages, or other electronic means… these will be crucial grounds for the Court’s ruling.

Civil Lawyer – Luat Kim Bang: Phone/Zalo: 034.540.6523