A debtor, within the meaning of this Title, is one who, by reason of an existing obligation, is or may become liable to pay money to another, whether such liability is certain or contingent.
Special Relations of Debtor and CreditorGeneral Principles
Section § 3429
This law defines a debtor as someone who currently owes or might owe money to someone else due to an existing obligation. The debt can be certain (definite and known) or contingent (depends on a future event).
debtor definition existing obligation liable to pay
Section § 3430
This law defines a creditor as someone who has a legal right to receive payment because an obligation is owed to them.
A creditor, within the meaning of this Title, is one in whose favor an obligation exists, by reason of which he is, or may become, entitled to the payment of money.
creditor obligation payment entitlement
Section § 3431
This law says that if there's no fraud involved, any agreement made by someone who owes money (a debtor) is valid against all their past or future creditors, as long as those creditors haven't placed a legal claim or lien on the property connected to that agreement.
In the absence of fraud, every contract of a debtor is valid against all his creditors, existing or subsequent, who have not acquired a lien on the property affected by such contract.
contract validity debtor agreements creditors
Section § 3432
This law says that if you owe money to several people, you can choose to pay one person first. You can also give one person a promise or collateral to pay them back before others if you want to.
A debtor may pay one creditor in preference to another, or may give to one creditor security for the payment of his demand in preference to another.
debtor creditor preference
Section § 3433
If someone owes money to two different creditors, but only one creditor can claim from all available funds, the other creditor can ask the first one to get paid from the funds that the second creditor can't access. This request can be made as long as it doesn't prevent the first creditor from fully collecting their debt or unfairly affect others.
Where a creditor is entitled to resort to each of several funds for the satisfaction of his claim, and another person has an interest in, or is entitled as a creditor to resort to some, but not all of them, the latter may require the former to seek satisfaction from those funds to which the latter has no such claim, so far as it can be done without impairing the right of the former to complete satisfaction, and without doing injustice to third persons.
creditor rights multiple funds satisfaction of claims
Section § 3434
If a lender provides a loan for the purpose of creating or improving property that will be sold or leased, they are generally not responsible for any issues or damages with that property. However, the lender can be held liable if the damage is due to the lender's actions outside their usual role, or if they were involved in any false statements about the property.
A lender who makes a loan of money, the proceeds of which are used or may be used by the borrower to finance the design, manufacture, construction, repair, modification or improvement of real or personal property for sale or lease to others, shall not be held liable to third persons for any loss or damage occasioned by any defect in the real or personal property so designed, manufactured, constructed, repaired, modified or improved or for any loss or damage resulting from the failure of the borrower to use due care in the design, manufacture, construction, repair, modification or improvement of such real or personal property, unless such loss or damage is a result of an act
of the lender outside the scope of the activities of a lender of money or unless the lender has been a party to misrepresentations with respect to such real or personal property.
lender liability loan proceeds design defects
