Verbal Loan Dispute
The client took out a loan of £10,000 to assist their partner in settling a purchase agreement and to buy a vehicle. The loan was transferred to the partner's bank account, and the client possesses text conversations as evidence of this transaction. Despite a verbal agreement between the couple that the partner would repay the loan, after their separation, the partner is now refusing to do so. The partner had been making standing order payments for over a year, which could imply acknowledgment of the debt. The dispute arose in England.
Questions about this case
These answers have been verified by a lawyer in the LEAP networkWhat are my chances of winning if I take him to small claims?
Your chances of winning in small claims court largely depend on the ability to demonstrate the existence and terms of the agreement, even though it was verbal. You have a strong starting point with the text messages and evidence of standing order payments, indicating acknowledgment of the debt by your former partner. Verbal agreements can be challenging to enforce, but the supporting evidence bolsters your claim. The court considers the parties' conduct to infer the agreement's terms. Highlight these details to substantiate your claim.
What evidence will strengthen my case in the small claims court?
To strengthen your case in the small claims court, focus on gathering and presenting the following evidence:
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Text Messages: Compile all messages where the loan transaction and repayment terms were discussed.
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Bank Statements: Provide documentation of the original transfer of funds and the standing order payments, supporting your claim of commitment to repayment.
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Any Witness Statements: If others were aware of your agreement, their testimony can corroborate your version of events.
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Loan Agreement Details: Draft a detailed written account of the terms as understood, along with any related documentation.
Consider reviewing guidance on the small claims process for additional information.
Are there any specific legal precedents in England that relate to verbal loan agreements?
In the UK, verbal agreements can be legally binding, but proving their terms can be challenging. The key legal principle is "consideration," meaning both parties must provide something of value. Notable cases have established that oral contracts can be enforced if you can prove their existence and terms. In your case, the regular standing order payments may serve as evidence of acknowledgment of the debt. Verbal agreements' legal principles apply across the jurisdiction.
How can I formally notify him of my intention to pursue legal action?
To formally notify him of your intention to pursue legal action, you can send a "Letter Before Action" (LBA). This letter should clearly state the amount owed, reference the verbal agreement, detail the payments made, and specify a repayment deadline, typically 14 days. Include copies of evidence such as text messages and bank statements. Send the letter via recorded delivery for proof. This step shows the court that you've attempted resolution before filing a claim.
What are the potential costs and timelines involved in a small claims court case for a loan dispute?
In a small claims court case, costs can include a court fee, which varies based on the amount claimed. For example, if your claim is for £10,000 to £15,000, the court fee would be approximately £455, plus any additional costs like legal advice or representation if you choose to hire a solicitor. The resolution timeline varies, but cases generally take a few months. Consider mediation as a potentially faster and less costly alternative.
