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Part II EU Jurisdictions, 3 Germany

Matthias Lehmann

From: Unfair Terms in Banking and Financial Contracts

Edited By: Danny Busch, Matthias Lehmann

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 14 July 2024

Banker-customer contract — Capital markets — Financial regulation

This chapter looks into the legal basis of unfair terms control in Germany. It highlights the country’s long-lasting legacy of controlling unfair terms, starting with the General Terms Act of 1976. Today, the rules on unfair terms are to be found in the Civil Code. They apply not only to business-to-consumer, but to a large extent also cover business-to-business contracts. The chapter shows how German courts have rigidly applied this legal framework to banking and financial contracts, outlawing many standard terms, such as fee clauses. The deterrence has been so strong that market participants may be tempted to escape German law altogether by choosing a different legal system.

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