Consumption Loan (Loan for Consumption)

Plain-language explanation

Article 587 of the Civil Code defines a "loan for consumption" (消費貸借) — the classic example being a loan of money, but it also covers loans of fungible goods like rice or oil, where the borrower returns the same type, quality, and quantity rather than the exact same item. This is the legal basis for ordinary borrowing and lending of cash between individuals, friends, or businesses.

The key structural point is that this is a "real contract" (要物契約): a mere promise to lend — "I'll lend you ¥1 million" — does not by itself create a binding loan obligation under this article. The contract only takes legal effect once the lender actually hands over the money or goods to the borrower. Until that handover happens, there's no enforceable duty to repay, and arguably no enforceable duty for the lender to actually deliver the funds either, under this article alone.

This matters in practice: if a business owner verbally agrees to lend a supplier money but never transfers it, Article 587 alone won't force them to follow through. That's why the related Article 587-2 is critical — it creates an exception allowing loans made in writing (or electronic record) to become binding upon mere agreement to deliver, even before money changes hands, while giving the borrower a right to cancel until they actually receive the funds. In business financing — bank loans, intercompany loans, shareholder loans — parties almost always use written loan agreements (金銭消費貸借契約書) precisely to lock in enforceability before cash actually moves, and to clearly fix interest rates, repayment schedules, and default terms.

日本語での解説

Common scenarios

• ▸中小企業が銀行から運転資金を借り入れる際の金銭消費貸借契約書の作成
• ▸会社が役員や株主から一時的に資金を借り入れる(役員借入金)
• ▸個人間での現金の貸し借りとその返済トラブル
• ▸取引先間で原材料や商品(代替可能な物)を一時的に融通し合う契約
• ▸書面契約前に資金交付を拒否された場合の法的救済の検討