You might be thinking…

• “How can a contract be invalid if we both signed it?”

• “What if we actually handed the thing over?”

• “Does a small formal mistake really matter?”

Clients often ask me…

• “Is a loan-for-use agreement valid without a duration?”

• “Is an oral agreement enough?”

• “If I lent my apartment to a friend without a contract, is it invalid?”

Legal explanation

Under the Czech Civil Code (§2193 et seq.), a loan-for-use contract (smlouva o výpůjčce) is a legal act that must meet specific conditions.
If any of these are missing or violate the law, the contract is invalid or never arises.

Key elements of a valid loan for use:

1. The subject is a non-consumable thing – something that is not destroyed by use (e.g., a car, tool, or building).

2. The use is free of charge – if rent is paid, it becomes a lease.

3. The use is temporary – it must be clear that the item will be returned.

4. The parties and the thing must be clearly identified.

When the contract is invalid or never arises

1. The subject cannot legally be lent

   • Consumable things (money, fuel, food) cannot be “loaned for use” – those are loans (zápůjčky).

   • In a loan for use, the same item must be returned, not an equivalent.

2. Missing written form for real estate

   • Under §560 of the Civil Code, a written form is required for real property; otherwise, the contract is invalid.

   • The same applies to property recorded in a public register.

3. Unclear or ambiguous terms

   • If it’s not clear what is being lent, to whom, for what purpose, or for how long, the contract is void for vagueness.

4. Contradiction with law or good morals

   • For example: “You can borrow the house, but you can’t return it for ten years.” Such an excessive restriction is invalid.

5. The reality doesn’t match the contract

   • If the document calls it a loan for use, but the reality shows rent or a gift, courts will requalify it — and the “loan” becomes invalid.

Common real-world mistakes

• “Loan for use” agreements made orally for years — impossible to prove when they end.

• No handover record — so there’s no proof the agreement was actually performed.

• Unclear liability for damage.

• Parties not properly identified (missing IČO, address, or legal representative).

• Oral loan of real estate — automatically invalid.

How to avoid invalidity – step by step

1. Write a clear, specific contract – include full identification of both parties.

2. Describe the item precisely – e.g., “Car Škoda Octavia, reg. no. XY123AB, VIN…”

3. Include duration or purpose – even “until further notice” or “for the time of renovation.”

4. State the purpose of the loan – helps in disputes (“for training purposes”).

5. Prepare a handover protocol – with signatures and a description of the item’s condition.

Example from practice

A company lent its partner a warehouse “for a few months.”
No contract, no paperwork.
After a year, the partner refused to vacate — claiming it was a lease.
The court agreed:
It wasn’t proven that the arrangement was a loan for use, since there was no written agreement and utility bills were paid.
Result: what was meant as a loan became a lease, and the lender lost control of the property.

Lawyer’s recommendation

An invalid loan-for-use contract means you have no legal certainty — the deal might be treated as a lease, a gift, or even unauthorized use.
Prevention is simple: write a clear, specific agreement, even if it’s just one page long.

Checklist:

• Written form (mandatory for real estate or legal entities)

• Precise description of the item

• Duration or purpose of the loan

• Handover protocol with condition of the item

• Proper identification of both parties

FAQ

Is an oral loan-for-use valid?
Yes, but only for movable items — and it’s very hard to prove.

What if there’s no duration stated?
The contract is valid, but the lender may demand return once the purpose of use is fulfilled.

When is a loan-for-use completely invalid?
For example, if it concerns consumable items (money, fuel), lacks required written form for real estate, or circumvents the law.