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About a month ago, someone who I was friends with for 3 years and have done business with called me while he was down in Miami, telling me that he and some others were trying to rent a boat. However, he and the others did not have a credit card with a high enough credit limit to pay the boat and he called me asking if I would be willing to let him use my credit card.

He told me that he was not paying for the boat, and informed me that his friend would be paying him the amount in cash the next day and that he would then be depositing that money and sending me a wire for it.

The next day, he started coming up with excuses, and fast forward two months later I'm yet to receive a dollar for the boat, however he continues to tell me that he's going to pay me and even claims he has sent a wire that I've never seen arrive. These communications were made both over the phone and by text. I have two people who were there while he was on the phone with me and could vouch about exactly what happened, and two people witness him receiving the cash but never paying me.

The situation is a bit complicated, however, as he lied to me about being 18 continuously and after the fact I ended up finding out that he was 17. I also have other people who can vouch for the fact that he told everyone he was 18, and I even have a plane ticket which he booked on my computer months ago in which he put his age as 18.

What actions does the law permit a creditor to take in such circumstances?

Edit

In a comment (made after the answers) the poster says that an additional one thousand dollars was to be paid along with repayment of the borrowed sum.

David Siegel
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Aaron Fortunato
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    Do you have reason to think he actually has the money to repay you, or is likely to earn it in a reasonable amount of time? If he's already spent the money and doesn't have any more, legal action may not help that much. The law can't squeeze blood from a stone. – Nate Eldredge Sep 01 '21 at 01:10
  • When the situation can be clearly explained in the text of the question, we do not need or want to see images of actual communications. Also, we can't ever answer questions of the "what should I do" sort. We can describe what the law permits and requires, and what legal procedures are for a particular sort of case or proceeding, but we cannot give legal advice. – David Siegel Sep 01 '21 at 01:12
  • as edited I do not think this constitutes a request for legal advice, and it should not be closed on that basis. – David Siegel Sep 01 '21 at 01:35
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    @DavidSiegal Subsequent comments make it clear the OP does not under the nuances of not asking for advice. Voting to close. – George White Sep 01 '21 at 03:42
  • I just voted to reopen. Please let me know if it gets reopened or if a propos of the additional payment you Ask a new question with that rather important detail added, since the answers provided so far are missing some key points. – Iñaki Viggers Sep 01 '21 at 11:50
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    @Iñaki Viggers You can follow the question. if you do, you will be automatically notified if it is reopened. I have added the info on the extra thousand dollars from the comment by the OP. Clearly marked as an edit, this should not invalidate prior answers. – David Siegel Sep 01 '21 at 14:49

2 Answers2

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Your friend, it seems, borrowed money from you in return for a promise to pay you back. That is a contract.

The friend has now failed to make good on the promise. That is probably default on the contract. You could sue your friend asking for a judgement in the amount of the loan. You might well win, but if the money has been spent and this person does not have a similar amount of money, such a judgement might be uncollectable.

Or you could sit on the debt, and try to collect at a later time when the person is more likely to have money. However, if you sit too long, the debt will be legally waived.

That this person is a minor matters only in that a minor may, in many cases, disaffirm (cancel) a contract. But, as this page from a law firm says:

If a minor voids the contract, he or she must disaffirm the entire contract. The minor cannot pick and choose the provisions of the contract that he or she likes or finds favorable. Additionally, the minor may be required to pay restitution for the benefit of the goods received. Additionally, the minor may be required to return the subject matter of the contract.

This Investopedia page says:

The person who disaffirms the contract must do so in its entirety. This means the party cannot pick and choose which parts of the contract they will disaffirm. Any property that has been transferred as a result of the contract can be recovered by the minor if they void the contract during a reasonable period of time.

In this case, to disaffirm it seems that the other party would, in effect, have to pay up, so this doesn't really change things.

If you don't sue and the other party does not fomally disaffirm within a reasonable time after s/he turns 18, the contract becomes fully binding.

David Siegel
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  • So, why is this a contract? Where is the borrower's consideration? – Greendrake Sep 01 '21 at 11:33
  • @Greendrake The borrower's consideration is the loan. The lender's consideration is the promise to repay. – David Siegel Sep 01 '21 at 13:59
  • The internet also says that it depends on the laws of the particular state, whether the minor is required to restore the victim to their original state. Which is not demonstrably required under Florida law, unless you found some evidence that that is the case for Florida. Credit card companies can get seriously singed, not just losing interest. – user6726 Sep 01 '21 at 15:01
  • @user6726 where on the net does it say that? I cited the sourced I found, neither of which are state-specific, and neither of which mention such a difference in law, but neither is a legal text book either. I am not challenging you, but I would like to read the source. – David Siegel Sep 01 '21 at 15:19
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There is no contract here

See What is a contract and what is required for them to be valid?

This arrangement lacks consideration from the borrower to the lender: basically, you aren't getting anything from this deal. Without consideration from both parties, the agreement is not a contract.

Fraud

This is more likely a simple case of fraud. The borrower received a financial advantage through dishonesty and deception - he said he'd pay you back and he didn't.

You can sue for restitution and/or report the matter to police who may bring criminal charges.

Dale M
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  • Hi, the contract was made over the phone and multiple witnesses who were there can vouch that an agreement was made. Would this make a difference? Do you believe that there is enough evidence for the police to consider it fraud? By going through police will I be able to receive the money? Thanks! – Aaron Fortunato Sep 01 '21 at 02:59
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    @AaronFortunato what did you get paid (money or otherwise) for lending the money? If it was nothing then it doesn’t matter if God almighty was a witness, you don’t have a contract. – Dale M Sep 01 '21 at 03:52
  • what do you mean by what did I get paid? I was to be paid the amount I spent and an additional thousand dollars on top to be paid the next day. – Aaron Fortunato Sep 01 '21 at 04:22
  • @AaronFortunato you never said in your question that you were being pad extra over the amount lent. You still don’t. Please do not edit this question as that will invalidate existing answers. Ask a new question with that rather important detail added. – Dale M Sep 01 '21 at 05:08
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    I never knew that a promise to repay an interest-free loan didn't create a contract. Quite surprising! –  Sep 01 '21 at 06:41
  • @RockApe an interest free loan can be a contract if there is some benefit flowing from the borrower to the lender. For example, if the lender is a shareholder of the borrower, that provides a benefit from the company to the shareholder because he company will use that loan to grow its value and the value of the shareholding. – Dale M Sep 01 '21 at 09:49
  • @Dale I have added the info on the extra thousand dollars from the comment by the OP. Clearly marked as an edit, this should not invalidate prior answers. I have also voted to reopen. – David Siegel Sep 01 '21 at 14:50
  • FYI most jurisdictions allow consideration to be a non-monetary value, which is the apparent underpinning of this transaction. – user6726 Sep 01 '21 at 14:59
  • Verbal promise to repay in clear-enough circumstances, especially if made in front of witnesses, is certainly a contract in all countries I've lived in. Interest is irrelevant. The OP failed to say where this happened, by the way... but there's such an example (interest-free) given at https://www.lawdepot.com/blog/are-verbal-agreements-legally-binding/ which seems US-based. What is unclear to from the Q is whether there was a clear promise when to repay. – the gods from engineering Sep 01 '21 at 17:57
  • Q: "his friend would be paying him the amount in cash the next day and that he would then be depositing that money and sending me a wire for it". That seems to me the promise to repay was made based on certain conditions, depending on a 3rd party's actions. These conditions may or may not have been met... I think at this point it gets quite complicated depending on jurisdiction... – the gods from engineering Sep 01 '21 at 18:07
  • I think the keyword(s) you're missing here in your (common law) contract analysis is "promissory estoppel": "Ordinarily, some form of consideration, either an exchange of money or a promise to refrain from some action, is required for a contract to be legally enforceable. However, in attempting to ensure justice or fairness, a court may enforce a promise even in the absence of any consideration, provided that the promise was reasonably relied on and that reliance on the promise resulted in a detriment to the promisee." https://www.investopedia.com/terms/p/promissory_estoppel.asp – the gods from engineering Sep 01 '21 at 18:29