ABSTRACT
The banker-customer relationship is typically based on one or more contracts concluded between a bank and its customer. The Law on General Conditions of Contract (AGB-Gesetz) does not focus on the banker-customer relationship but deals with all kinds of general conditions of contract or standard form contracts as used in the various areas of commerce and industry. In their general conditions of contract, the banks propose German law as the applicable law, and if the customer accepts these conditions, a choice of law to this effect is agreed. In Germany, it was widely held that the highly developed jurisprudence on the German Law on General Conditions of Contract takes care of most issues addressed in this Directive and that little change in German legislation was needed. An example of the test of fairness being applied by the courts to the general conditions of banks is found in the problem of over-collateralisation of loans.
