3 ms·
It seems pretty straightforward and logical if you view the payment as the second payment of a series. If you look at this sequence of events you can see why i
by CPLX 6y ago
It seems pretty straightforward and logical if you view the payment as the second payment of a series.
If you look at this sequence of events you can see why it might be problematic:
1) Bob has money, which he lends to Dave. Dave has possession but it's still Bob's money.
2) Dave returns the money to Bob. It's Bob's money and he has possession of his own money.
3) Nobody owes anyone anything and there's no obligation from either Dave or Bob to do anything as any agreement that existed has been fulfilled.
4) Court orders Bob to give Bob's money to Dave.
The action contemplated in point 4 here is a pretty extraordinary remedy. Even though it's Bob's money, and there's no contract or agreement outstanding that obligates him to do anything, and even though Bob has done nothing wrong and is not in breach of any obligation or agreement he's going to be ordered to give money, which is his and he has every right to have, to someone else.
It's pretty easy to see why the legal system might decide that's not something it wants to do.
- bdowling 6y ago> 1) Bob has money, which he lends to Dave. Dave has possession but it's still Bob's money. That's not the way a loan is structured legally. Legally, a loan is a bargained-for exchange (a contract) in which the lender gives the borrower money and the borrower promises to make payments according to a schedule. (Note: It can be more complicated than that.) When the borrower receives the money, it becomes his money. If the borrower doesn't make the payments, then the lender can sue for breach of contract or to foreclose on a security interest if there is one. > ... there's no contract or agreement outstanding that obligates him to do anything ... By default, a lender is entitled to receive the stream of payments specified in the loan contract and is not required to accept prepayment if he doesn't want to (e.g., if the lender is receiving interest at 10% and the current rate is 5%, the lender does not have to allow the borrower to pay the principal all at once). Prepayment rules can be modified by the loan contract terms (e.g., imposing a penalty for prepayment) or by statute (e.g., a state law requiring housing mortgages to allow prepayment without penalty after some amount of time).