Change of Circumstances (Section 313 BGB) Trigger for the Next Financial Crisis?

Abstract

This article aims to analyse the facts of a recent landmark decision of the Supremo Tribunal de Justiça (Portuguese Supreme Court of Justice – 'SJT') under German law. Furthermore, now that the dust has settled after the financial crisis, it gives a general overview of the German law on interest rate swap contracts. Particular emphasis is placed on whether the financial crisis can be seen as a change of circumstances under section 313 Bürgerliches Gesetzbuch (German Civil Code – 'BGB').

Note: This article is published in this Research Paper Series with the permission of the rights owner, Kluwer Law International.

Keywords: Swap contracts, Financial crisis, Bank’s Advisory Duty, Infringement of Public Policy § 138 Bürgerliches Gesetzbuch (German Civil Code – ‘BGB’), Change of Circumstances (§ 313 BGB), Artigo 437 Código Civil Português (Portuguese Civil Code)