Finance:Bank guarantee case

From HandWiki
Bürge
CourtFederal Constitutional Court of Germany
Decided19 October 1993
Citation(s)BVerfGE 89, 214, NJW 1994 36
Keywords
Contract, inequality of bargaining power

The Bank guarantee case or Bürge (19 October 1993) BVerfGE 89, 214 is a German contract law case, concerning the interpretation of private law, and particularly the law of contract, in a way that is compatible with basic human rights principles. It was held that the power of freedom of contract must be interpreted in a way that protects people's genuine (rather than formal) autonomy, in those situations where there is a structural inequality of bargaining power.

Facts

The case concerned a series of claimants, including spouses and children, of a party which had mortgaged the family home, in order to secure a loan from a bank. The banks had required that, in return for the loans, the family would guarantee the debts. The validity of these contracts were challenged.

Judgment

See also

  • Barclays Bank plc v O’Brien [1994] 1 AC 180

Notes

References

  • BS Markesinis, H Unberath and A Johnston, The German Law of Contract (2010) Case No 81, for partial translation

External links