Banking contract law and general terms and conditions of banks

Even standard contracts between banks and clients, as well as between different banks, have grown substantially in complexity as a result of numerous legal requirements. What matters most here is to understand the parties’ mutual rights and obligations, as well as the risks, that arise from such contracts. High-quality, competent legal advice and professionally drafted contracts help avoid legal disputes between banks/financial services providers and clients from the outset. For the best legal dispute is the one that never arises. Only those who know their rights and the contract drafting options available to them will be able to negotiate a contract with optimal results. The necessary professional know-how can be obtained conveniently and at low cost from a law firm specializing in banking contract law. Associating a lawyer to assist with contract negotiations is therefore generally by no means unaffordable, but rather is, in the best sense of the word, worth the price, especially in the business world, where there is generally more room for negotiating contract terms.

Aside from banking-specific issues, material issues involving contract law also include issues related to general terms and conditions. WSHP has extensive know-how and experience in this area and will assist you not only with reviewing pre-drafted clauses of contract partners, but also help you draft your own general terms and conditions in compliance with applicable laws, so as to create a sound legal basis for your business endeavors. We offer these services not only to companies in the financial services industry, because the fundamental issues concerning the legal validity of general terms and conditions are the same across different industries. Thus, drafting any contracts under civil law, including general terms and conditions, is part of our core competencies. We offer this legal service to all midsize companies and, in close cooperation with them, develop the best possible way to structure their business relationships.

We also help clients draft contracts for factoring and leasing transactions, making use of the numerous structuring options available in this area. Risks associated with these transactions often go unnoticed, or the complexity resulting from the three-party constellation and the diverging interests of the contracting parties is underestimated.

In recent years, contracts involving swap transactions have received much criticism. Economically speaking, a swap transaction is an umbrella term for derivative financial instruments whose shared feature is an exchange of future payment flows. As a general rule, a swap transaction with an end customer is a financial transaction that is settled off the securities exchange. This is why such transactions are also referred to as over-the-counter (OTC) transactions. Difficulties for clients arise, primarily, from the complex structures and mechanisms of these transactions and the risks they harbor. In addition, swap transactions have often resulted in litigation because the parties offering such transactions generally price into the interest rate profit margins that are virtually undetectable for clients and generally are not disclosed (so-called initial negative market value). Depending on the particular circumstances of each case, a failure to disclose such profit margins, in of itself, can give rise to claims for damages.

When difficulties or disputes arise in the course of the performance of a contract, the legal options available often can be established and explained during an initial consultation, allowing you to vivo determine very quickly what courses of actions, if any, are available to you.

If a legal dispute should ultimately arise nonetheless, we will represent your interests in and out of court and enforce your rights and claims.

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