Verbal loan

[Darryl]

I loaned a lady I met on the internet $4,000 to purchase a car. I have known her for almost two years. In our conversations, we had discussed her paying me back at a rate of $166 a month for two years. She is in Washington State and I am in California. She has recieved the pink slip for the car in her name, the total purchase price was $5,500. She has not started payments, and I have asked. What recourse do I have?

 

[Tracey]

What the hell were you thinking with when you loaned a stranger $4000 without getting the terms in writing?

You have to sue her in district court for $4000, get a judgment, and file a lien on the car or garnish her wages. If you had a signed financing statement, you could assert a security interest under 62A RCW Art. 9. Without it, all you can do is sue her for fraudulently inducing you to give her money. You can't sue on the contract because oral contracts over $1000 (I think) violate the statute of frauds. I'll check the dollar limit later - the WA law site is down right now.


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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

 

[Darryl]

Thank you Tracey, let me know if you find out more under the Washington law. I will most likely contact a local attorney next week if I do not hear from the lady I loaned the money too by then. Thanks for your reply and any toher information you can provide.

 

[Tracey]

The web site's back up! http://www.leg.wa.gov/wsladm//ses.htm Here's the WA statute of frauds:

RCW 19.36.010
Contracts, etc., void unless in writing.

In the following cases, specified in this section, any agreement, contract and promise shall be void, unless such agreement, contract or promise, or some note or memorandum thereof, be in writing, and signed by the party to be charged therewith, or by some person thereunto by him lawfully authorized, that is to say: (1) Every agreement that by its terms is not to be performed in one year from the making thereof; (2) every special promise to answer for the debt, default, or misdoings of another person; (3) every agreement, promise or undertaking made upon consideration of marriage, except mutual promises to marry; (4) every special promise made by an executor or administrator to answer damages out of his own estate; (5) an agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation or a commission.


RCW 19.36.100
"Credit agreement" defined.
"Credit agreement" means an agreement, promise, or commitment to lend money, to otherwise extend credit, to forbear with respect to the repayment of any debt or the exercise of any remedy, to modify or amend the terms under which the creditor has lent money or otherwise extended credit, to release any guarantor or consigner [cosigner], or to make any other financial accommodation pertaining to a debt or other extension of credit.


Since your agreement was not in writing & signed (unless she had some sort of email signature or there was a written letter talking about the loan), nor can it be performed in 1 year (you specified a 2 year payment period), the contract may be void. You'll have to hire an attorney to research that issue. If it's void, your only hope is to sue her in quantum meruit for unjust enrichment of $4,000. You might use the threat of suit to force her to sign a contract acknowledgin the loan and its terms, and securing the loan with the car. Once you have a signed security agreement, you can file a lien on the car & foreclose the lien if she misses payments.


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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

[This message has been edited by Tracey (edited June 20, 2000).]