Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 44
Germany
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44
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
Property
Have any changes
been made to
the laws around
property, rent and
enforcement?
•
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 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 are 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. 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.
•
The German government has passed legislation that excludes terminations of
tenancy agreements in the event of late payment of rent for the period from 1 April
2020 to 30 June 2020 if the failure to pay is due to the effects of the COVID-19
pandemic. The correlation between the failure to pay and the COVID-19 pandemic is
not assumed but must be shown credibly by the tenant.
•
The period from 1 April to 30 June 2020 can be extended by decree until 30
September 2020, i.e. to a total of six months. Any extension beyond this requires the
approval of the German parliament.
•
The exclusion of termination ends on 30 June 2022, i.e. by this date the rent in arrears
(including default interest) must be paid to avoid a termination. Other termination rights
remain unaffected, i.e. the ordinary termination right for unlimited rental contracts as
well as the extraordinary termination. For more information, please see here.
Government measures in key jurisdictions
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