TITLE IX
LOAN
CHAPTER I
LOAN FOR USE
Section 640. A loan agreement for use is a contract whereby a person, called the lender, lets another person, called the borrower, have gratuitously the use of a property, and the borrower agrees to return it after having made use thereof.
Section 641. A loan for use is complete only on delivery of the property lent.
Section 642. Costs of the contract, costs of delivery of the property lent and costs of return are born by the borrower.
Section 643. If the borrower uses the property lent for purposes other than ordinary purposes or purposes appearing from the contract, or lets a third person have the use of it, or keeps it longer than ought to, he is liable for any loss or damage to the property caused by force majeure unless he proves that the loss or damage would have happened in any case.
Section 644. The borrower is bound to take as much care of the property lent as a person of ordinary prudence would take of his own property.
Section 645. In any cases provided in Section 643, or if the borrower acts according to Section 644, the lender may terminate the contract.
Section 646. If no time is fixed, the property shall be returned after the borrower has made the use of it for the purpose appearing from the contract. The lender may claim the return of the property earlier, if so much time has elapsed that the borrower might have made the use of it.
If no time is fixed and no purpose appears from the contract, the lender may claim the return at any time.
Section 647. Expenses for ordinary maintenance of the property lent must be borne by the borrower.
Section 648. A loan for use is extinguished by the death of the borrower.
Section 649. No action for compensation in connection with a loan for use can be entered later than six months after the extinction of the contract.
CHAPTER II
LOAN FOR CONSUMPTION
Section 650. A loan for consumption is a contract whereby the lender transfers to the borrower the ownership of a certain quantity of property which is consumed in the user, and the borrower agrees to return a property of the same kind, quality and quantity.
The contract is complete only on delivery of the property.
Section 651. Costs of the contract, costs of delivery of the property lent and costs of return are borne by the borrower.
Section 652. If no time for return of the property lent has been fixed, the lender may give notice to the borrower to return the property within a reasonable time to be fixed in the notice.
Section 653. A loan of money for a sum exceeding two thousand baht in capital is not enforceable by action unless there be some written evidence of the loan signed by the borrower.
No repayment of a loan of money evidenced by writing may be proved unless there be some written evidence signed by the lender, or the document evidencing the loan has been surrendered to the borrower or cancelled.
Section 654. Interest shall not exceed 15% per year; when a higher rate of interest is fixed by the contract, it shall be reduced to 15% per year.
Section 655. Interest shall not bear interest. The parties to a loan of money may, however, agree that the interest due for not less than one year shall be added to the capital, and that the whole shall bear interest, but such agreement must be made in writing.
Commercial usage for the calculation of compound interest in current accounts, as well as in similar commercial transactions, are not governed by the forgoing paragraph.
Section 656. If a loan is made for a sum of money, and the borrower accepts goods or other property instead of such sum, the amount of the debt due shall be considered as equal to the market value of the goods or property at the time and place of delivery.
If a loan is made for a sum of money, and the lender accepts goods or other property for the repayment of the loan, the amount of the debt extinguished thereby shall be considered as equal to the market value of the goods or property at the time and place of delivery.
Any agreement to the contrary is void.
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