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New Orleans Criminal Lawyer > Blog > White-Collar Crime > What sort of a penalty is restitution?

What sort of a penalty is restitution?

From time to time, New Orleans residents need loans in order to cover their expenses. Some people get their loans from banks and other lending institutions. Others borrow money from friends and family members. However, when two parties agree that one will extend money to another and, in return, the borrower will eventually return the funds, a loan is generally made.

Sometimes misunderstandings occur when such loans are made. For example, a party may believe that another promised to give him money, when, in reality, the alleged loaning party did not intend to extend any such credit. If the party who erroneously believed that he would be a borrower spends money with the belief that he will be getting a loan from the other party, he may find himself in an even more serious situation than he was in before he sought out a loan.

If a court finds that a party made an unenforceable financial promise to another and that party relied on the promise and experienced harm as a result, the court may order the defendant to pay restitution. The idea behind restitution is to restore the victim to the state he or she was in before the crime.

As mentioned, however, criminal charges based on promises and unenforceable contracts can sometimes begin as misunderstandings. An alleged victim may believe that he is owed restitution, when, in fact, it was his error in believing that a financial promise was made. While every case of contract fraud and financial crime is different, individuals seeking such penalties can choose to face their charges and present evidence to support the facts of their restitution cases.

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