The loan for use agreement (commodatum) is a type of contract that exists but is relatively unknown to most people, which is why it is not commonly used.
This contract is provided for in Article 1129 of the Civil Code and subsequent articles, and it is defined as: “the gratuitous contract by which one party delivers to another a certain thing, movable or immovable, so that the latter may use it, with the obligation to return it.”
Regarding the return of the item, the law provides for several scenarios: one is where a deadline for return is agreed upon; another is where, in the absence of a defined deadline, the item must be returned as soon as the specific use for which it was loaned (whether movable or immovable) has ended—this return must occur without the need for any formal notice. A third scenario applies when no deadline or specific use has been established: in such cases, the borrower must return the item as soon as requested by the lender.
Let us consider, for example, a situation where a loan for use contract was entered into regarding a property, and the contract specified that the property would be used as a family residence by the borrowers.
In this case, one might assume that the owner could only request the return of the property once the borrowers ceased using it as their family home—because as long as they continued using it for that specific purpose, they would have a legitimate basis for occupying it.
However, it is important to clarify that the loan for use contract, as defined in Article 1129 of the Civil Code, inherently involves a temporary arrangement. Therefore, such a contract cannot subsist indefinitely.
So, when a loan for use contract is made for a specific purpose involving a property, as in the above example, that purpose must not only be clearly expressed, but it must also be limited in duration. This is why a use is only considered specific if it is also time-bound in relation to the need that the contract seeks to address.
The rationale for this requirement stems directly from the social function that this type of contract serves—it originates from a favor granted by one party to another. Such a favor is not compatible with prolonged use, particularly of a property. Otherwise, the contract would essentially mask a gift or even the granting of a right of use or habitation.
Nevertheless, a clause in a loan for use contract allowing the borrower to use the property until their death is not invalid. However, the interpretation of such a clause must align with the law, meaning that even in this situation, the property owner may terminate the contract and request the property's return at any time, given the social function that underpins this contractual arrangement.
This interpretation is also confirmed by the general principle set out in Article 237 of the Civil Code, which governs the interpretation and supplementation of contractual statements in doubtful cases. It states that in gratuitous contracts (as is the case with the comodato), the interpretation that is less burdensome to the grantor shall prevail—in this case, the property owner.
Finally, it should be noted that the existence of a loan for use contract does not impose any encumbrance on the property in the event of its sale. The comodato contract does not have effects against third parties and binds only the parties who entered into the agreement. Therefore, if the property is sold, the loan for use contract terminates.
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