The loan agreement can be concluded in any form and if the lender agrees with the borrower on its material terms, it will be valid. Nevertheless, the Civil Code for loans exceeding a certain value reserves a specific form for evidential purposes. Until recently, art. 720 pairs 2 kc. it stated that a loan agreement worth more than PLN 500 should be confirmed in a document for evidence purposes. Failure to comply with the written form resulted in an adverse effect on the parties to the agreement, which resulted in the fact that in the court dispute concerning the loan, no witness evidence or evidence from the hearing of the parties was admissible. I wrote about it here: What is worth remembering when borrowing money?
From September 8, 2016, this requirement has changed, both as to amount and form. The changed wording of art. 720 pairs 2 kc. it currently provides that the loan agreement, the value of which exceeds one thousand zlotys, requires maintaining the documentary form.
What is the documentary form?
The document form is a new kind of special form provided for legal transactions (including contracts). It was introduced to the Civil Code on the basis of the Act of 10 July 2015 amending the Civil Code, the Civil Procedure Code and certain other acts (Journal of Laws of 2015 item 1311), which entered into force September 8, 2016.
What is the documentary form is defined in art. 77 sq. Of the Civil Code stating that to document the form of a legal transaction, it is enough to submit a declaration of will in the form of a document in a way that allows the person making the statement to be determined.
The aforementioned amendment of the Civil Code also introduced a new definition of the document. It contains art. 77³ of the Civil Code, according to which the document is an information medium that allows you to read its contents. The new definition of a document means that it will be not only a letter containing the signature of the page, but also information recorded on a paper other than paper, if this medium will be able to preserve and reproduce the information. The document will also be, for example, an e-mail or an SMS message, but also a file containing an image or sound recorded on the information carrier allowing to reproduce expressed statements of the will of the parties.
It follows from the above that the documentary form is less formalized than the traditional written form. The latter requires the submission of a person’s signature on a document containing the content of the declaration of will. The document form does not require this. It is enough to determine the person submitting the declaration of intent, which may occur on the basis of the content of the document itself or after checking the data carrier or device with which the statement was made. However, this is necessary because without assigning a declaration of will to a specific person, one can not speak about keeping the documentary form. It should be noted that in certain situations this may be a potential matter of dispute between the parties or involve legal risk.
For the document form, the same legal effects were foreseen for the written form. Disclaimer of the documentary form without a nullity clause has the effect that it has been reserved exclusively for evidence purposes. This excludes the possibility of taking evidence from witnesses or hearing the parties in order to show that a given legal action has been made. The sanction of invalidity will be applicable when the parties (or the act) reserve this rigor in relation to the preservation of the documentary form of a legal transaction.
A loan above PLN 1000 is best in documentary form.
As I have already mentioned, the documentary form was introduced as a requirement for evidentiary purposes in relation to the loan agreement, the amount of which exceeds PLN 1,000. The content of such loan agreement should be recorded in a way enabling its reconstruction. The signature of the pages is not necessary, as it is not a necessary element of the document. A loan agreement in excess of PLN 1,000 can therefore be freely disclosed, e.g. in the form of text, sound or image, and also recorded on any medium, e.g. on paper by means of a letter or in an electronic file by means of a computer or smartphone. It is important that the consolidation of information on the loan agreement makes it possible to preserve and reproduce it.
With regard to documents in the electronic form, the record may be placed on one IT data carrier or on several such carriers, each of which will contain a part of the document, and its reading and reproduction will take place using appropriate software processing data from carriers.
You can still conclude loan agreements in traditional written form with the signatures of the lender and the borrower deposited on a paper document, as it meets the requirements of the document form.
The document form for evidence purposes applies to loans in excess of one thousand zlotys. As a consequence, the fact of concluding a loan agreement of a lower value and its content can be proved in civil proceedings using the testimonies of witnesses and parties.