Loan Arrangement Fee Agreement

Compatibility of fee clauses with general terms and conditions Recent judgments of the Bundesgerichtshof have confirmed that a clause requiring payment of a treatment fee is unduly prejudicial to the borrower even in the context of a commercial transaction and is therefore not valid under Article 307(2)(1) of the Civil Code. According to the Bundesgerichtshof, the levying of such a fee departs from the legal concept of German law according to which the only price to be paid for the use of the proceeds of the loan is that of interest and that, according to the General Court, there is nothing to justify such a derogation. The Bundesgerichtshof also pointed out that, in the light of Article 310 of the Criminal Code, which requires the General Court to take account of usual practices (14) and practices (15) of trade, no other opinion is likely to be taken. Since consumer credit agreements are also subject to processing fees, this is not common when it comes to business transactions. . . .