Either the loaner or the lender has the private key. Even in a multisig setup, 1 party has a chorum.
A legal contract does not enforce custody and has privacy implications in case of litigation. 

 privacy could be a concern but we still have laws here in the US that are enforceable/ my guys still honor the handshake and don't like next level bs 

 just the way i've done a few things   win/wins 

 both sides happy 

  with a private contract