Banking law, capital market law and investment law

Revocation of loan contracts

Due to inadmis­sible cancel­lation instruc­tions in consumer loan agree­ments or inade­quate infor­mation under distance selling law, it is sometimes possible to revoke a loan agreement even years after it has been concluded and thus reverse it. In combi­nation with a bank that supports a debt resched­uling, the borrower may be able to get rid of his high-interest loan agreement without an early repayment penalty and save a lot of money in the future by signing a new loan agreement with lower interest rates. Or if the loan agreement is termi­nated prema­turely by selling the property, the early repayment penalty can be saved and the remaining loan amount reduced in the event of a successful cancel­lation. In certain case constel­la­tions, the bank’s claim to early repayment compen­sation may even be waived. In such a case, if the borrower has already paid the early repayment fee to the bank, it can be reclaimed. The OLG Frankfurt a.M. decided on this in its ruling of 01.07.2020.

Attorney Fürstenow examines loan agree­ments as to their revoca­bility and advises on this and repre­sents in dealings with the bank financing the loan.

Account and payment transactions

The bank account or current account is the central point of the legal relationship between banks and their customers. Here too, there is a need for legal advice if, for example, a giro card or credit card with the associated PIN is lost through no fault of the bank customer — e.g. when a new card is sent — and the bank customer suffers a financial loss as a result of card misuse.

Funding

The right form of financing is crucial, especially during the start-up phase of a company and during the initial phase of newly founded start-ups. But even estab­lished companies that are on a growth course or want to realize individual new projects are faced with the task of finding the right financing. A variety of financing forms have to be considered, starting with tradi­tional financing on the capital market (e.g. share issue), through new financing forms such as crowd­funding, to mezzanine financing. Attorney Fürstenow offers legal advice and support in all financing matters, such as negoti­ating contracts with financing partners and others.

Legal counsellor

According to a survey by Stiftung Warentest in February 2018, up to 2,000 cards are “lost” annually in Berlin alone. If you are affected, too, our article regarding the misuse of credit cards and giro cards might help you out.

Banking law practice and lectureship

Banking law is not only part of the daily legal work of Attorney Fürstenow. As a lecturer at the BankColleg, a university of cooper­ative education for banking for the in-service training programme for banking specialists and banking business econo­mists, which belongs to the GenoAkademie as the largest cooper­ative educa­tional insti­tution in Germany, Attorney Fürstenow teaches banking law and related legal topics and areas, which include in particular the law of oblig­a­tions and property law of the German Civil Code (BGB) as well as commercial and corporate law. The GenoA­cademy is in turn an insti­tution under the auspices of the Genossen­schaftsverband — Verband der Regionen e.V.

The topics taught by attorney Fürstenow are manifold. It is about the general classi­fi­cation of banking trans­ac­tions in the current legal system as an essential part of the community, whereby in turn private law, i.e. civil law, forms the basis of the legal relationship between the bank and the customer, whereby European law also plays an important role.

Governing law

Thus, it is the task of attorney Fürstenow to convey which legal norms apply and how they are applied. Before complex contractual arrange­ments can be under­stood, it must first be clear who the bank’s contractual partners are. The legal capacity (who can be the bearer of rights and oblig­a­tions) and legal capacity of persons or majorities of persons or partner­ships (also legal persons or majorities of persons with partial legal capacity), capacity to act, power of repre­sen­tation play an important role here. If the Bank’s contracting party performs its legal trans­ac­tions in person or, for example, through its legal repre­sen­tative (parents or managing director of a GmbH).

Special private law for merchants

Who is the bank dealing with, e.g. a general partnership (OHG), a limited partnership (KG), a partnership (PartG), a limited liability company (GmbH), an associ­ation with legal capacity, a cooper­ative (eG), a stock corpo­ration (AG), a foundation etc. and who repre­sents the respective company? Attorney Fürstenow also answers these questions.

Also important in this context is commercial law as a special private law for merchants with the topics of merchant status, trading company, auxiliary persons and the right of repre­sen­tation of merchants (assistant, power of attorney, power of attorney, shop power of attorney), special features of commercial trans­ac­tions (general and typified, such as the commission contract or the current account) and special commercial customs (such as the commercial letter of confirmation).

Banking business as a contractual legal transaction

For a general under­standing, it is important to under­stand the banking business as a (contractual) legal trans­action. Mr. Fürstenow teaches about the conclusion of contracts, formal require­ments and the legal conse­quences of incorrect legal trans­ac­tions or decla­ra­tions of intent or of limitation. The focus is always on the legal trans­ac­tions which may be unilateral or multi­lateral, not requiring receipt or receipt or oblig­atory legal trans­ac­tions. The most important multi­lateral legal trans­action is the contract that comes into existence through appli­cation and accep­tance (conclusion of contract). The inter­pre­tation of the contract, i.e. the deter­mi­nation of the will of the parties, is then decisive. Erroneous legal trans­ac­tions can be reversed if the actual intention differs from what was declared by the possi­bility of contesting the decla­ra­tions of intent.

Next, the contractual oblig­a­tions are to be considered as a legal relationship between at least two persons in general with their mutual rights and oblig­a­tions, in particular the oblig­ation to perform and the oblig­ation to recip­rocate, the failure to perform in case of breach of duty and the need to be repre­sented, also for pre-contractual behaviour, with the possi­bility of withdrawal and compen­sation. The German Civil Code knows different typified contracts as special law of oblig­a­tions, like the sales contract. As an everyday type of contract that is encoun­tered every­where, the following are of impor­tance: The oblig­a­tions of the seller and the buyer, the bearing of risk, the more specific warranty oblig­a­tions under purchase law that take prece­dence over general law, material defects or defects of title, the special features of retention of title or extended retention of title. In addition, there are a number of other types of contract in the German Civil Code, such as the rental contract, the contract of service, the contract for work and labour. contract of agency as contractual oblig­a­tions. In contrast, there are statutory oblig­a­tions, such as management without a mandate, unjust enrichment (transfer of assets without legal grounds) and tort (damaging misconduct of a person).

Special arrange­ments: General Terms and Condi­tions of Business

Contracts often have general terms and condi­tions as essential elements, or general terms and condi­tions create applicable framework condi­tions, as is the case with banks. The decisive factor is the effective inclusion in the respective contract and in the particular the exami­nation of the legality or illegality of GTC contract clauses.

The bank account

The legal basis for a bank account is the account agreement. This defines the rights and oblig­a­tions of the parties involved in the account relationship. It is therefore of crucial impor­tance (as with any contract) who is actually the legal owner of the account or account holder. Also important are autho­rised repre­sen­ta­tives and the scope of their powers of repre­sen­tation and dispo­sition, who are permitted to make account dispo­si­tions. The account ultimately repre­sents a claim of the bank client and account holder against the bank. Therefore, the account is trans­ferred or pledged by way of an assignment of claim. Therefore, attorney Fürstenow also presents the principles of the attachment of claims. Typical account forms are own accounts (individual or joint account), trust accounts, escrow accounts, escrow accounts, order accounts and blocked accounts.

An important manifes­tation is the giro contract as an agency agreement against payment according to §§ 675, 611 German Civil Code. The giro contract serves the customer to partic­ipate in payment trans­ac­tions. The Bank executes the corre­sponding instruc­tions (e.g. transfers) of the customer. A further custody agreement for the credit balance and a loan agreement due to overdraft of the account are concluded. The Bank accepts and credits incoming funds under the current account agreement and executes transfers to other accounts.

A current account agreement within the meaning of sections 355 of the HGB is associated with the current account agreement and is used to settle and determine a surplus by means of current period accounts.

In the event of incorrect postings, the right of enrichment under sections 812 ff. German Civil Code shall apply. Attorney Fürstenow presents the different case constel­la­tions in the trian­gular relationship (cover ratio, value date ratio and grant ratio).

Cashless payment transactions

Cashless payment trans­ac­tions, in short: payment law, deals with the various payment services, such as credit transfer, direct debit, cheque, card-based payment trans­ac­tions, online banking, direct debit, SEPA direct debit.

The Bank’s oblig­a­tions to provide infor­mation and advice in connection with customer transactions

Important are the bank’s duties of conduct towards its customers. For this purpose, attorney Fürstenow explains the legal basis of such oblig­a­tions, such as § 241 para. 2 German Civil Code (secondary oblig­ation) or an independent consul­tancy agreement. Likewise, Attorney Fürstenow explains the burden of proof, i.e. who has to prove a breach of duty, and the require­ments for a claim for damages arising from such a breach of duty, e.g. in payment trans­ac­tions or in securities or credit trans­ac­tions. This also includes the oblig­ation to be repre­sented, i.e. by inten­tional or negligent action or omission. In addition to a claim for damages “on the merits”, calcu­lation methods are then required to assess the damage “on the merits”.

The Cooper­ative Bank and the Cooper­a­tives Act

Cooper­ative law is important because Volks- und Raiffeisen­banken are consti­tuted as cooper­a­tives. Therefore, Attorney Fürstenow presents the basic principles of membership, the rights and duties of the members as well as the organs of the cooper­ative, the board of directors, the super­visory board and the general assembly.

The deposit business / The right of withdrawal when concluding contracts outside business premises

Attorney Fürstenow discusses the differ­ences between the various deposit trans­ac­tions and the classi­fi­cation of their legal character, such as the loan character pursuant to Section 488 of the German Civil Code. In particular, he deals with savings deposits and the legal charac­ter­istics of the passbook.

The consumer has a right of revocation for contractual decla­ra­tions made by the consumer outside business premises. For this purpose, lawyer Fürstenow explains the instruction and form regula­tions which must be observed by the bank. If these are faulty, the consumer can revoke the contract.

The Credit and Security Agreement

Credit agree­ments or loan agree­ments are about the relationship between lender and borrower under the law of oblig­a­tions and their rights and oblig­a­tions, which can be found in the German Civil Code. In particular, attorney Fürstenow, explains the extra­or­dinary and ordinary termi­nation options and their conse­quences, such as the early repayment penalty (compen­sation of the bank) and their calcu­lation methods. Furthermore, both the loan interest and the interest on arrears are dealt with and under which condi­tions a loan claim can be assigned.

The consumer loan agreement intended for natural persons is of particular impor­tance. Consumers enjoy special protection, which is guaranteed by various regula­tions. For example, the German Civil Code (BGB) and the Intro­ductory Act to the German Civil Code (EGBGB) contain special provi­sions on the form and content of consumer loan agree­ments and a specially regulated right of revocation. In this context, attorney Fürstenow also mediates the various possi­bil­ities of struc­turing the contents of the corre­sponding security agreement.

Collateral

In the case of personnel collateral, attorney Fürstenow deals with the widespread form of the guarantee and the legally prescribed formal and substantive require­ments of a guarantee decla­ration, such as the written form, the naming of a maximum amount and the decla­ration of purpose. The possi­bil­ities of invalidity due to immoral­ities and termi­nation are dealt with and the extent to which consumer loan law plays a role.

According to the previ­ously discussed loan and associated security agreement, as an oblig­atory trans­action, i.e. the oblig­atory part, attorney Fürstenow deals with the so-called perfor­mance trans­action, the transfer of ownership of the security and its partic­u­lar­ities, such as acqui­sition in good faith. In addition to movable goods as security, there are also other types of security, such as order papers and claims. There is basically the variant of the transfer of ownership by way of security and that of the lien. Lawyer Fürstenow explains the economic and legal risks of the respective variant in relation to the different types of collateral.

Land register

The land registers, which are kept as public registers at the local courts, can be inspected by anyone. Attorney Fürstenow explains the procedure for the acqui­sition of real estate and the structure of the land register into its various sections as well as the require­ments for entries, in particular with regard to the entry of mortgages used as security by banks.

Mortgages

Attorney Fürstenow explains the differ­ences between the various types of real estate liens and the signif­i­cance of the decla­ration of purpose in practice. In this connection he also deals with the prereq­ui­sites for the enforcement of and reali­sation by forced admin­is­tration or forced sale.

The client in family law

If the bank enters into a business relationship with a married person, it is necessary to check which matri­monial property regime exists between the spouses. Attorney Fürstenow presents the various matri­monial property regimes and their legal impli­ca­tions for the banking business.

In the law of parent and child custody, attention must be paid to the extent to which the legal repre­sen­ta­tives are entitled to carry out banking trans­ac­tions for the minor child or the person being cared for, or whether the consent of the family court may be required. In this regard, attorney Fürstenow explains the differ­ences between parental custody, care and guardianship.

The death of the customer and the conse­quences under inher­i­tance law

If a business partner of the bank dies, the question arises as to what happens to his or her receiv­ables and liabil­ities. This is regulated by the law of succession. Inher­i­tance law offers the testator a wide range of options. Attorney Fürstenow explains the basic principles of inher­i­tance law, including the formal and deadline norms, the differ­ences between the statutory law of inher­i­tance and the voluntary succession, for example by will, inher­i­tance contract or bequest, as well as the special form of the Berlin will. Other measures during the lifetime of the deceased, such as powers of attorney and joint accounts and the contract in favour of third parties, are also shown. In this respect, the delim­i­tation of the gift of the customer to the third party required here is also clarified, for example. The special features of the savings book, recall risks and powers of disposal are also explained in more detail.

Proce­dural Law

In order to be able to enforce its claims against the creditor/borrower, the bank requires a so-called enforceable title. Attorney Fürstenow shows on the basis of the law of action and dunning procedure which possi­bil­ities there are to obtain such an enforceable title and which titles there are in detail. The contents of the proce­dural require­ments as well as the individual legal remedies are conveyed. The possi­bility of arbitration proceedings in disputes between credit companies and customers is also addressed.

Enforcement law

After one is in possession of an enforceable title, the claim (usually monetary claims) can be enforced by means of enforcement. Attorney Fürstenow explains the general and special require­ments of the various enforcement proceedings and the involvement of the relevant enforcement bodies. The possi­bil­ities of the special proce­dures for securing assets during the often lengthy enforcement proceedings, such as attachment and prelim­inary injunc­tions, are also shown. Insol­vency law, in which creditors are not satisfied in full but only according to a quota distri­b­ution, also often plays a major role in this context and is therefore also explained.

Labour Law

Labour law is a central topic for everyone. Attorney Fürstenow deals here with the estab­lishment of an employment relationship and the rights and oblig­a­tions of both employer and employee and what these are based on, such as a contract, collective agreement or by law, such as the Continued Remuner­ation Act or the Federal Leave Act. Furthermore, the different types of termi­nation of an employment relationship, such as termi­nation agreement and notice of termi­nation, are addressed, including the necessary reasons and periods of notice. In this context, Attorney Fürstenow also deals with the Dismissal Protection Act and the dismissal protection lawsuit as well as the area of collective bargaining law.