Am I legally obligated to repay a personal loan made between another person and myself if that person died?
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Am I legally obligated to repay a personal loan made between another person and myself if that person died?
It was a verbal agreement between us and he had several post-dated checks he never deposited and told me not to worry about it but now that he passed away his adult daughter found the checks and wants me to pay them.
Asked on August 1, 2011 Georgia
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The problem with oral agreements to perform contracts is two fold. First, it may be difficult to ascertain the terms of the contract if both sides disagree. You need some form of outside evidence to help prove the contract. Next is something known as the statute of frauds. That is a law enacted in each state that says that certain agreement must be in writing to be valid. In this case, and without knowing more, the terms in the amount of repayment would be the checks in the daughter's possession. Do they indicate it was a loan? Could it be inferred (same amount each month)? If the obligation was to take more than a year to repay then the SOF comes in to play. BUT, if there is performance on one side and it is accepted by the other the SOF may not apply. DO the right thing: repay the estate. Your friend did the right thing for you when he was alive.
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