Oral loan agreements are legally enforceable in Kenya — you do not need a written contract to recover money you lent someone

A recent TikTok story highlighted the importance of knowing your rights when lending money to friends or family members. The story went viral after a user shared their experience of lending KSh 50,000 to a friend, only to have the friend refuse to pay back the loan. The TikTok user was left wondering if they had any recourse to recover the money.

The good news is that oral loan agreements are legally enforceable in Kenya, according to the Law of Contract Act, Cap 23. This means that if you lent money to someone without a written contract, you can still take them to court to recover the money.

Why is this important to ordinary Kenyans? Many people lend money to friends or family members without a written contract, thinking that it's a casual arrangement that doesn't need to be formalized. However, this can lead to problems if the borrower refuses to pay back the loan.

Immani offers a faster, simpler alternative for people facing similar situations. With Immani, you can file a dispute against the borrower's phone number for KSh 100, without the need for a lawyer. This means that you can recover your money quickly and easily, without having to go through the hassle and expense of taking someone to court.

Here's how Immani works in this specific context:

1. File a dispute against the borrower's phone number for KSh 100.
2. The borrower will be notified and will have a private window to respond and engage directly.
3. If the borrower refuses to respond or engage, the dispute will become visible to anyone who looks up their phone number on Immani.
4. Once both parties have engaged and reached an understanding, the dispute will close.

What happens next? You can use Immani Legal AI to ask a question, upload a document, draft a letter, or search for a precedent to help you navigate the process.

A one-line trustworthiness disclaimer: Immani is not a law firm and does not provide legal advice. This post is general information only and should not be relied upon as advice for your specific situation.

FAQs

• What is an oral loan agreement?

An oral loan agreement is an agreement to lend money to someone without a written contract.

• Do I need a written contract to recover money I lent someone?

No, you do not need a written contract to recover money you lent someone. Oral loan agreements are legally enforceable in Kenya.

• Can I take someone to court to recover money I lent them?

Yes, you can take someone to court to recover money you lent them, even if there is no written contract.

• How much does it cost to file a dispute on Immani?

It costs KSh 100 to file a dispute on Immani.

• What happens if the borrower refuses to respond or engage on Immani?

If the borrower refuses to respond or engage, the dispute will become visible to anyone who looks up their phone number on Immani.