Banking law, capital market law and investment law
Mr. Fürstenow advises and supports clients in banking law, capital market law and investment law.
Capital market law
Revocation of loan contracts
Account and payment transactions
Credit transactions, in particular the granting of money loans, are the classic focus of banks and savings banks. In the case of consumer loans and, in particular, real estate loans, the borrower should seek legal advice solely because of the imbalance between the contracting parties, but also because a lot of money is involved, especially in the acquisition of real estate. Also the usually long running time is to be considered with loan contracts.
Legal assistance is also offered for private loans, real estate loans, delivery credits, instalment payments and public promotional loans during the preparation of the contract, but also during the execution, termination or rescheduling of the loan agreement.
The German Banking Act (KWG) contains a comprehensive codification of lending by banks to protect the functioning of the banking industry. This is achieved, for example, through concrete requirements for lending (equity ratio, provision of collateral). A loan agreement, a security agreement to provide security (in the case of a real estate loan, a land charge should be entered in the land register) and, if necessary, a real estate purchase agreement should be coordinated.
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.
Capital market law, investor protection
The term capital market refers to the markets and stock exchanges on which capital investments are traded (traditional stock exchanges, commodity and futures exchanges and other trading venues). The aim of capital market standards is to ensure the proper functioning of the capital market and to protect investors. Attorney Fürstenow advises and represents investors for the purpose of investor protection, who have experienced a financial loss e.g. due to wrong advice or breaches of duty during the mediation for worthless facilities.
By the acquisition of worthless real estates or by investment into other worthless investments (real estate funds, company participation, profit participation certificates etc.) due to partly intended wrong consultation of the investment advisors investors are again and again seriously damaged financially.
With the experience gained from numerous investor law-suits and negotiations with unwanted contract partners, attorney Fürstenow offers comprehensive advice and support to injured investors. The first step is to check whether there is any possibility of indemnifying the investor or reducing the loss. Depending upon organization of the circumstances different damages and persons which can be taken up come into consideration: investment advisors or investment mediators, establishment partners etc.
Attorney Fürstenow also offers advice and representation of investment advisors or investment intermediaries who are wrongly called upon. Because also despite dutiful investment consultation an investment cannot develop as desired. Nevertheless, then a scapegoat is looked for and found in the investment consultant or investment mediator.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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