There was never a written agreement and no repayment terms were setup. Will this hold up in court? The payment was from her personal account not a joint account and the amount they are demanding is more than double what was borrowed.
Unfortunately, you and your relative's spouse are proof why no loan among friends or family members should ever be made without a formal writing.
Putting aside the moral obligations to repay your debts, an unwritten loan is difficult to enforce by either party especially where one is dead. Do you have any documentation regarding the loan?
Did the decedent's will address this loan? How does the deceased's spouse know of the loan?
The amount of the demand may be based on an interest rate from the date of the loan. A court, if called upon, may fill in certain reasonable loan terms in determining the existence and extent of liability.
The NY statute of limitations is 6 years from the default or breach of repayment. Conceivably, an argument could be made that the default occurred on the date that repayment was demanded. There are lots of facts that need to be developed in order to provide a fuller answer.
Depending on the amount in question, you may want to seek an attorney's guidance.
Are you liable? Death does not end the liability. But, demanding double what you borrowed does not seem reasonable. You should contact a lawyer close to where you live. You may have some good defenses to the repayment of the debt.
Generally it will not hold up in Court without a written agreement.
Nothing in this shall be deemed legal advice in any way and is meant for general informational purposes only. No attorney client relationship has been established.
My colleagues all give you good advice. First, I imagine the reason that the amount demanded is double the sum of money provided to you is to goad you into a defense that you actually borrowed less. Your defense, depending on the specifics, could then serve as an admission of liability.
Right now, the only real proof that exists that the money was borrowed and was not a gift is your posting right here. So, you might not wish to make any more public postings such as this one.
Where money is provided by one relative to another and there is no writing, it is not easy for anyone to proove that this was a loan as opposed to a gift.
It would help to know a few more details. At any rate, you may wish to consult with an attorney. You can feel free to contact me if you'd like -- or to contact any of the other fine attorneys here on avvo.
Good luck to you.
Michael S. Haber is a New York attorney. As such, his responses to posted inquiries, such as the one above, are limited to his understanding of law in the jurisdiction in which he practices and not to any other jurisdiction. In addition, no response to any posted inquiry should be deemed to constitute legal advice, nor to constitute the existence of an attorney/client or other contractual or fiduciary relationship, inasmuch as rendering legal advice involves the ability of the attorney to ask appropriate questions of the person seeking such advice and to thus gather appropriate information. In addition, an attorney/client relationship is formed only by specific agreement. The purpose of this answer is to provide the questioner with general information, not to outline specific legal rights and remedies.
Generally speaking, contracts can be verbal or in writing. A writing is, in many instances, merely better evidence of the intent of the parties should there later be a dispute. However, certain agreements are unenforceable under New York law if they do not conform to New York's version of the statute of frauds, which requires a writing, as set out at N.Y. GOB. LAW § 5-701. The Statute is always the best place to start to see if your facts fit within it. Then look at the exceptions. The Statute states:
a. Every agreement,
promise or undertaking is void, unless it or some note or memorandum
thereof be in writing, and subscribed by the party to be charged
therewith, or by his lawful agent, if such agreement, promise or
1. By its terms is not to be performed within one year from the making
thereof or the performance of which is not to be completed before the
end of a lifetime; ... (the statute continues)...
In addition, you must also consider whether the claim is time barred under an applicable statute of limitations.
Thus, there may be an enforceable claim for repayment. However, that would depend on the individual circumstances of your loan, including all the terms of the loan. In addition, the enforceability of the loan may also depend on the conduct of the parties. Issues to be considered might include any waiver or enforcement by the creditor, or recognition of the loan by the debtor. In short, you should consult an attorney, because there is no hard and fast rule.
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