Government measures in key jurisdictions 5th edition - Flipbook - Page 55
Germany
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
•
The German government introduced legislation that grants consumers and
small companies the right to refuse performance of a contract (in particular
payment) in order to protect them from financial hardship resulting from the
measures taken to prevent the spread of infections. Small companies are those
with less than 10 employees and less than EUR 2 million annual turnover.
•
These measures generally require that it concerns claims from a continuing
obligation established before 8 March 2020 which debtors are not able to fulfil due
to the Covid-19 pandemic or, due to the Covid-19 pandemic, the fulfilment of such
claims would endanger their means of subsistence or the economic basis of their
business. At the same time, the creditor must not be unreasonably affected as a
consequence. The right to refuse performance for consumers and microentrepreneurs, which affects, among other things, essential basic service
contracts, was limited to the period from 1 April to 30 June 2020. This means that
as of 1 July 2020, the addresses of regulation will no longer be able to defer their
payments due to the Covid-19 pandemic and, in the event of non-payment, will be
in default and may incur interest on arrears.
•
The provisions do not apply to employment contracts, tenancy agreements and
loan agreements.
•
For consumer loan agreements concluded before 15 March 2020, lenders’ claims
for interest or repayment of instalments due between April and June 2020 were
deferred for a period of three months from the due date if the borrower suffers a
loss of income due to extraordinary circumstances caused by the spread of the
Covid-19 pandemic which makes it inappropriate for the borrowers to fulfil their
obligations. After expiry of this moratorium, the payment obligation will resume. As
of 1 July 2020, the deferred monthly loan instalments must therefore be paid again
unless consumers have agreed on a different solution with The individual payment
dates as well as the end of the term of the loan will be postponed by three months
in each case, unless the parties agree otherwise. The regulations are to apply to
consumer loan agreements only. However, there is the possibility of extending the
scope of application of the law by means of a statutory instrument to small
companies as well.
•
Corona info – the legislator acts – we summarize for you
•
The Covid-19 pandemic will have a significant influence on how to draft
force majeure clauses in the future. For more information, see here.
•
Contracts on the acquisition of German companies may in future not be closed
anymore while investment control proceedings are still pending if the company is
active in a certain sectors (e.g. health care) and a non-EU investor (directly or
indirectly) acquires more than 10% of the voting rights. For more information, see
our article ‘Upcoming changes to German foreign investment control regime’.
•
For merger control filings, the review periods have been temporarily extended.
For more information, see here.
Government measures in key jurisdictions
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