For the most part, I have to agree with most of the rest of the folks. Anything I borrow is returned in better condition than when I got it. If it busts, I fix it.
In this case, I see two problems. First is it doesn't sound like it was exactly borrowed. Sounds like he was at your place (or your dad's) and was using your dad's tractor to load hay that he was buyin' from you and your dad. By rights it ain't his hay until it's on his truck or trailer -- I don't know what the custom is out your way, but in general we never expected people to bring equipment to load things like round bales. If they were buyin' square bales, yeah they ought to bring enough people to do load it. So if you didn't have time and told them to go ahead and use the tractor, that's a little different in my book than them borrowing/ you loaning the tractor.
Still, it's obvious he hit something with it to break the grille, and if it had been me drivin', I'd have been right up front about payin' for the damage. I don't know how severe or obvious the damage is, but if you give this guy the benefit of the doubt, and since he has offered to buy the part but probably wasn't figurin' on $900 . . .
Solomon says . . . Get an estimate for the repair and approach him with the plan to have a body shop make a good repair to it. You'll have a good job and a good grille, and I expect the other fella will be out some good money, but nothing like what a new grille costs.
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