GER: Loan Agreements: Are You Liable for Your Ex’s Car Loan?

Sept 8, 2023 Benn-Ibler Rechtsanwälte

Even though she is financially unable to cope, a young woman was to be held liable for her ex-boyfriend’s car loan. The immorality of such a loan agreement was recently established by the Oldenburg Higher Regional Court.

In the case at hand, a young woman had contracted with her boyfriend to borrow around EUR 90,000, paying off just over EUR 1,000 per month. The boyfriend was going to use the money to pay off some old loans and to buy a car. The woman, who was in her early 20s, earned EUR 1,300 net per month as a saleswoman in a bakery. Two years later, when the woman’s ex-boyfriend failed to pay the instalments, the bank cancelled the loan and called in the rest of the debt, about EUR 50,000. The bank sued the woman in the regional court for payment because it had not received the money from the young woman’s boyfriend. The woman’s appeal against the judgement was to the German Oldenburg Oberlandesgericht (Higher Regional Court), which ruled in favour of the young woman and rejected the bank’s claim for payment.

According to the court, the woman was not a real borrower. She had merely assumed joint liability. It is a person’s own interest in the loan that determines whether they are a true borrower or merely a joint debtor. A person can only be considered a joint debtor if, as in this case, they do not have a clear economic interest in the loan.

Loan agreements as the one in the constellation at hand are generally possible, but in this case such an agreement is considered immoral and therefore void because of the overall constellation of the parties involved as well as the obvious, blatant financial overload of the woman.

The bank should have been aware of the relationship between the parties as well as their tight financial situation when concluding the agreement. It goes against the decency of all fair-minded people for banks to exploit such a situation.

Press Release, Oberlandesgerichts Oldenburg, OLG Oldenburg, 8 U 172/22 (29 June 2023)