Government measures in key jurisdictions 3rd edition final - Flipbook - Page 56
Germany
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
Property
Have any changes
been made to
the laws around
property, rent and
enforcement?
56
•
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