What is a loan for use agreement and when to use it

A loan for use agreement is a contract where the lender allows the borrower to use an item temporarily free of charge, and the borrower undertakes to return it after the agreed time or upon achieving the agreed purpose.

Typical examples of loan for use agreements:

• lending a car, bicycle, equipment,

• lending technology or tools,

• lending movable property within family, friends, or between businesses.

Legal framework

The loan for use agreement is governed by the Czech Civil Code (Sections 2193 to 2200).
Key elements:

• free-of-charge use of the item,

• obligation to return the item after time or purpose is fulfilled,

• obligation to take proper care of the item.

For real estate, it is recommended to conclude the agreement in writing.

Mandatory elements of a loan for use agreement

• Identification of the lender and borrower

• Description of the borrowed item (type, condition, identification)

• Purpose of use (optional but recommended)

• Duration of the loan (fixed or purpose-based)

• Obligation to return the item

• Date and signatures

Most common mistakes in practice

• Vague description of the borrowed item (especially condition)

• No clear agreement on the duration

• Lack of conditions for the return of the item in its original state

• No handover protocol

• Using the item for commercial purposes (which conflicts with the free-of-charge nature)

Recommendations for lenders and borrowers

Lender:

• Specify clearly how the item may be used.

• Consider requiring the item to be returned undamaged.

Borrower:

• Treat the borrowed item with due care.

• Return the item on time and in its original condition.

Tip from practice

Disputes often arise over the damage of borrowed items.
It is recommended to record the item’s condition in a short handover protocol (including photos) as evidence when returning the item.

Basic loan for use agreement template – available for a symbolic fee

If you need a simple loan for use agreement template for movable items, I can send it by e-mail for a symbolic fee.

This template is suitable for standard cases and serves as a working draft.
For more specific loans (e.g., insurance, extended use, special conditions), I am happy to prepare a customized agreement for you.

If interested, please contact me via e-mail, contact form, or message. We will arrange everything quickly and easily.

Final thoughts – what now?

A loan for use agreement isn’t just a formality – it’s a legal shield, if drafted properly. And a trap, if not.

Do you want to be sure your contract will hold up even in a crisis? Get in touch and let’s schedule a meeting.