Herbert Smith Freehills Germany LLP updates

Are arrangement and processing fee clauses in commercial loan agreements invalid?
Herbert Smith Freehills Germany LLP
  • Banking
  • Germany
  • September 08 2017

The Federal Court of Justice recently issued two rulings declaring that processing fee clauses in standardised commercial loan agreements are invalid as they unreasonably disadvantage borrowers. Previously, the majority of lower German court rulings had upheld the validity of such clauses in commercial loan agreements. Going forward, lenders have a number of options to deal with the issues raised in these new court decisions.

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