Explanation of Article 382
The article defines a loan contract as a contract by which the lender transfers ownership of a fungible item to the borrower, with the condition that the borrower returns an item similar to the borrowed one. Paragraph (1) of Article (21) clarifies fungible items as: "those whose units are identical or similar enough that they can substitute for each other upon fulfillment without any significant difference according to custom." Examples include money, measurable foodstuffs like dates and wheat, and weighed metals like gold and silver. The article indicates that a loan contract does not apply to valuable assets, which Article (21) defines as: "those whose units vary significantly in characteristics or value according to custom, or those that are rarely found in circulation." Examples include land and used items. The definition of a loan contract highlights its main characteristics, which are: 1 - It is a contract of ownership because the lender transfers ownership of the borrowed item to the borrower. 2 - It is binding on both parties because the contract imposes obligations on both contracting parties. 3 - It is a gratuitous contract because the borrowed item must be returned without any increase; the lender donates the benefit of the borrowed item for the duration of the loan. 4 - It is a real contract, not consensual; it is not concluded except by delivery, as will be explained.
Related To
Article 382
Loan is a contract under which a lender transfers ownership of a fungible thing to a borrower, provided that the borrower returns a thing of the same kind to the lender.