A loan-receipt agreement is a legal agreement between two parties, usually in a tort case, where the defendant lends money to the plaintiff without any interest. The plaintiff is not required to repay the loan unless they receive compensation from other parties responsible for the same injury.
A loan-receipt agreement is a type of settlement agreement in torts. It is an agreement between the defendant and the plaintiff, where the defendant lends money to the plaintiff interest-free. The plaintiff is not obligated to repay the loan unless they recover money from other tortfeasors responsible for the same injury.
For example, if a person is injured in a car accident and the accident was caused by multiple parties, the plaintiff may enter into a loan-receipt agreement with one of the defendants. The defendant may lend the plaintiff money to cover their medical expenses and other damages. If the plaintiff later recovers money from the other responsible parties, they will use that money to repay the loan.
Another example is in a product liability case. If a person is injured by a defective product, they may enter into a loan-receipt agreement with the manufacturer. The manufacturer may lend the plaintiff money to cover their medical expenses and other damages. If the plaintiff later recovers money from the retailer or distributor of the product, they will use that money to repay the loan.
These examples illustrate how a loan-receipt agreement can be beneficial for both the plaintiff and the defendant. The plaintiff receives the necessary funds to cover their expenses, while the defendant is protected from having to pay more than their fair share of the damages.