In the above case Jacinta borrowed money from her family and

In the above case Jacinta borrowed money from her family and friends amounting to $3000, which she
was unable to pay and when the family members approached her for the repayment of the loan she said
that the same shall be considered as a gift. But according to the law , the amount lent to someone can
not be considered as gift if that fulfills the following elements:
 There was a written agreement between the parties that they are entering in to a lender and
borrower agreement.
 The party that is borrowing the money repays the loan in intervals.
Whereas, the gifts are the indirect financial contributions made by the family members. Along with this
the gift benefits both the parties.
Therefore, in the above case the money lent to Jacinta by her family members will be considered as loan
and not gift because there was no benefit received by the family members by lending the money to
Jacinta hence the money borrowed by Jacinta are loan and not the gift. Here, Jacinta is liable to pay the
money that she borrowed from her family members.
Philip Ostromogolsky, "Lender-Borrower Relationships And Loan Origination Costs" [2016] SSRN Electronic
Journal.
John Quiggin, "Quiggin Responds To "Neither Borrower Nor Lender Be" By Thomas J. Grennes" (2005) 2(2) The
Economists' Voice.

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References
 Ostromogolsky, Philip, "Lender-Borrower Relationships And Loan
Origination Costs" [2016] SSRN Electronic Journal
 Quiggin, John, "Quiggin Responds To "Neither Borrower Nor Lender Be"
By Thomas J. Grennes" (2005) 2(2) The Economists' Voice
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