CanI be made to repay a gift?

In 06/10, a close friend gave me a financial gift to help pay for a debt. At the time the friend who made  the gift was doing very well. They had in fact just inherited a legal settlement (which is why they offered to help). Now, this friend is having financial difficulties and is trying to collect on the gift that was given to me 6 months ago. We have nothing in writing because this was truly what it was, a gift. Nor did we agree on any sort of re-payment. How do you now go back and say, “Oh, I need you to pay me that money back and if you don’t then I’ll sue you for it”. Can she do that?

Asked on December 30, 2010 under Bankruptcy Law, Georgia

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You are both going to claim different versions with the same set of basic facts.  You are going to claim that it was a gift and she is going to claim that it was an oral contract for a loan.  What you are going to come up against is what is known as the Statute of Frauds, which is a law that says that certain agreements must be in writing in order to be valid.  From what I have read of te law in Georgia, a promise to lend money must be in writing.  However, if the contract has been fully executed or performed on one side with acceptance by the other side then it may not need to comply with the written rule.  I would seek help here from someone in your area.  It could be a tough call.  Good luck.

 

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Legally, a gift is "nonreturnable"--that is, if something is gifted, the gift giver has no right to get it back. They can ask--there's nothing illegal about asking for a return--but they have no power to compel it's return.

Practically, if there is nothing evidencing whether or not something was a gift or a loan and what its terms are, then it comes down to the testimony of the two parties and any inferences or implications from their situations--i.e. what can each party reasonably prove? Can the one who is no claiming it is a loan show that? If the one saying it's a loan has at least *some* evidence--even if it's no more than her testimony, uncontradicted by anything in writing--she can at least get into court and initiate a law suit.

You therefore need to consider the situation, any equities or fairness, and what evidence you have, to decide whether, if actually sued, it's worth defending or whether you may in fact be better returning the "gift."


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