Your Relative Says the Money Was a Gift, Not a Loan

If your relative accepts receiving money but says it was a gift, proving the transfer is only part of the task. For a DIFC loan claim, you need evidence of the repayment agreement, not just evidence that you financed a business or expected gratitude. Start with the original conversations and records, before the relationship broke down.

A family loan or gift dispute can involve the same payment documents but very different explanations. Separate the questions below. The amount advanced may be undisputed while the alleged obligation to return it remains the central issue.

Does a bank transfer prove that your relative borrowed the money?

A transfer record can establish an amount, date and destination. It may not establish the reason for the payment or the agreement between the parties. The same is true of paying a supplier directly for a relative's business. You still need to explain why that expense created the particular repayment obligation you allege.

In Mahesh Srichand Tourani v Dusty Tourani and Duzty LLC, CFI 007/2018, the defendants did not dispute that the claimant had advanced AED 14,947,348 for their benefit. The money funded a DIFC restaurant. The real dispute was whether the advances were a gift or a loan.

The court found that the money was a gift and dismissed the claim. This is not a rule that relatives cannot lend to one another. It shows why reconstructing expenditure alone may fail to answer the decisive question. Keep proof of payment, but build a separate account of the agreement said to require repayment.

If several transfers were made over time, do not automatically treat them as one arrangement. Identify which conversation or document governs each group. An initial gift and a later alleged loan need separate examination, as do business funding and ordinary personal expenses. Explain any change in the arrangement honestly.

Can an oral family loan still be legally recognised?

The absence of a signed loan agreement is not, by itself, the end of the enquiry. Where the DIFC Contract Law applies, Article 9 of the published March 2024 consolidation does not generally require writing and allows proof by other means, including witnesses. Formation still requires an agreement, rather than one person's private understanding.

In Tourani, the judge considered the alleged oral agreement rather than rejecting it simply because it was unwritten. The problem was the evidence of its terms. The claimant's explanations of when repayment was due changed, and the court concluded that a material term was missing from the agreement alleged.

Write down what you actually remember. Who spoke? Who was present? Where did the conversation take place? What was said about returning the money? Distinguish your recollection of the words from what you later inferred. A witness who heard the discussion may help differently from someone whom you told about it afterwards.

Do not create a backdated agreement to repair the file. If both sides now want to record or settle their position, obtain advice on an accurately dated document that distinguishes the historical facts from any new terms. A truthful later record is different from pretending a document existed before the transfer.

Key takeaway. A missing signature and a missing agreement are different problems. Preserve evidence of the actual words, acceptance and repayment terms instead of treating proof of payment as a complete loan case.

Why did the repayment terms matter so much in Tourani?

The claimant gave different explanations about repayment: after the restaurant began operating, when the recipient could afford it, on demand and in connection with incorporation. The court examined these inconsistencies in paragraphs 27 and 53. It did not accept that a sufficiently clear repayment agreement had been established on the evidence.

For your own file, separate the date of the advance from the date or event said to trigger repayment. If you say payment depended on business performance, locate the words explaining that condition. If you say it was repayable on demand, identify the basis for that term rather than assuming a later demand creates it.

This does not establish that every loan without a calendar repayment date is invalid. The judgment addressed a particular alleged agreement and inconsistent evidence. Whether a term can be identified, interpreted or otherwise supplied under the applicable law requires assessment of the actual transaction.

Preserve the recipient's response to earlier repayment requests. A clear acknowledgment, a disagreement about timing and a statement that the money was a gift are different records. Keep the complete exchange, including your own description of the arrangement. Extracting one favourable sentence may conceal the context needed to understand it.

What can accounts and witnesses establish?

The Tourani judgment examined the claimant's bookkeeping and the evidence of his bookkeeper. Records of the advances had to be reconstructed from suppliers and contractors. The judge did not accept that this evidence established the alleged loan, particularly when considered with the other evidence about the arrangement.

That finding does not create a compulsory bookkeeping format for every private loan. It does show the difference between a record made while the arrangement was operating and a schedule assembled after litigation began. Keep both, but explain when and why each was prepared.

A ledger entry describing money as a loan may be relevant without settling the issue alone. Ask who entered it, when it was entered and what instruction or document supported it. If the other party received and responded to accounts, preserve that exchange. Do not assume your internal label was an agreed term.

Ask potential witnesses for their own recollections without supplying a preferred version to adopt. Identify whether they were present at the original discussion, handled a payment or merely heard one side's later account. The legal adviser can assess how each witness relates to the disputed agreement.

Does a family relationship mean the court will presume a gift?

The court considered the parties' actual relationship and history of financial support in deciding Tourani. It found that the claimant had not intended repayment when he made the advances. The later deterioration in the relationship did not persuade the judge that the original funding was a loan.

Do not turn that factual finding into a universal presumption about parents, children, siblings or other relatives. Nor does the amount alone settle the question. The article uses one DIFC commercial funding judgment, not personal-status law or a general rule governing every family transfer.

Keep the legal-review file focused on the disputed funding. A relationship history may explain the context, but unrelated accusations are not substitutes for evidence of repayment terms. In Tourani, the judge repeatedly treated collateral allegations and aspects of other disputes as irrelevant to the issue being decided.

If the dispute involves a company as well as your relative, identify who made the alleged promise and in what capacity. A company benefiting from funding and an individual agreeing to repay personally are not the same factual proposition. Preserve incorporation documents, funding requests and communications identifying the intended recipient or borrower.

Common mistake. Recasting every generous payment as a loan after a relationship ends, without identifying an agreement to repay that existed when the money was advanced.

Can unjust enrichment rescue the claim if the loan is not proved?

Tourani included an alternative unjustified-enrichment claim. The parties agreed that a finding of a gift would dispose of the dispute, including that alternative. Having found a gift, the judge dismissed the claim and did not need to decide an independent restitution case on a different factual basis.

The decision therefore does not provide a general checklist for every enrichment claim. It does not say that a failed loan allegation automatically produces repayment under another label. If an alternative claim is proposed, ask the adviser to identify its separate legal and factual basis and explain how it fits the evidence.

Keep any genuine investment documents in the file too. Do not omit them because they complicate the loan narrative. A promised ownership interest, expected profit share or conditional contribution may require a different analysis from an unconditional debt. This guide does not decide which description fits an individual arrangement.

Be consistent about what you know and what remains disputed. A recipient may accept the amount but deny the alleged terms. Recording that distinction accurately is more useful than saying the entire debt has been admitted when only the transfer has been acknowledged.

What should you prepare before making a repayment demand?

For an alleged oral agreement, RDC 17.41 calls for the statement of case to identify the contractual words and who said them to whom, when and where. Rule 17.42 similarly addresses an agreement alleged through conduct. Use those questions to find gaps before escalating the dispute.

1. List the advances. Identify amounts, dates, recipients and payment evidence without duplicate entries.
2. Record the agreement. Preserve the original words, messages, witnesses and claimed repayment mechanism.
3. Compare later conduct. Include accounts, acknowledgments, demands, responses and any repayments.
4. Identify the correct claim. Check the alleged debtor, applicable law, jurisdiction and time limits with an adviser.
5. Choose a supported response. Consider a focused demand or settlement discussion based on the evidence rather than unrelated family allegations.

Do not wait indefinitely for an informal family discussion to resolve a potentially time-sensitive claim. Ask for a deadline assessment while the documents are gathered. The case discussed here does not establish jurisdiction over every Dubai family loan or determine the limitation date of your proposed claim.

Sources checked on October 1, 2026. Contract Law references use the officially published March 2024 consolidation. The 2018 Tourani merits judgment was read with the later March 2019 consent costs order. Bounded public searches found no later merits reversal, but are not a complete docket check.

Frequently Asked Questions

Does an admitted transfer mean the debt is admitted? No. In Tourani, the advances were accepted but their legal character was disputed. The court found a gift.

Must every DIFC loan agreement be written? Article 9 of the DIFC Contract Law does not generally require writing. Applicability and any transaction-specific requirement still need checking.

Why did the oral-loan claim fail in Tourani? The court found the evidence of the alleged agreement and repayment terms insufficient and concluded that the advances were a gift.

Does having no fixed repayment date always defeat a loan claim? No such universal rule follows from this judgment. The terms and applicable law must be assessed on the actual evidence.

Can a bookkeeper's loan entry decide the dispute? Do not assume so. Its timing, source and relationship to what the parties agreed all need examination.

Are all payments to relatives presumed to be gifts? This judgment does not establish that rule. Its conclusion depended on the particular relationship, records and evidence.

Can I rely on unjust enrichment simply because I cannot prove a loan? An alternative claim needs its own basis. Tourani's gift finding disposed of the alternative claim on the parties' agreed position.

Can I use this case for any family money dispute in Dubai? No. Confirm the applicable law and the court's jurisdiction. The article concerns a particular DIFC commercial funding dispute.

This article is general information and does not constitute legal advice. For advice on a particular dispute, consult a qualified advocate.

Related Guides

See the Dubai and DIFC commercial-contracts section and these related guides.

• Loan money paid to a third-party account
• Checking the deadline for an old debt
• A settlement agreement remains unpaid

Related Guides

Our DIFC commercial contracts page covers payment, suspension, termination, guarantees and shareholder disputes under DIFC-law agreements.

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