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In many cases, this may not be a practical option, as lenders usually prefer to make the draft loan agreement available to the borrower. However, demanding sponsors often provide the first draft of the credit agreement. Individual negotiation The contractual conditions are not considered as general conditions of sale, insofar as they have been negotiated individually between the parties. German case law is strict, which it accepts as being negotiated individually. (10) It is not sufficient that a specific clause has been discussed between the parties. A clause derogating from the legal provisions must have been “freely negotiable” as a whole. (11) In a recent judgment of the Oberlandesgericht Dresden (12), the parties to a commercial loan agreement negotiated the amount of the processing fee, but it was not clear whether the borrower could refuse to pay a processing fee (i.e. the fact that the lender had to charge a processing fee did not appear to be negotiable). This led the Court to decide that the corresponding clause was not negotiated individually and was therefore placed under the control of the courts as general terms and conditions of sale.

Avoiding the application of German law One solution may be to avoid the application of German law to the loan agreement, which contains the corresponding fee clauses, by choosing as the applicable law of such a loan agreement the law of a court which does not consider these clauses invalid. Details of fees are usually included in a separate subsidiary letter from the underlying establishment agreement, to ensure confidentiality. The fee notice is finalized and the royalties must normally be paid upon signature. Fee letters are also made available to institutions that have performed certain roles or assumed greater responsibility in the credit process, primarily the arrangers, the facility agent and the security guard. In accordance with Article 3 of Regulation (EC) (593/2008) (Rome I), contracting parties are in principle free to choose the law applicable to their contract. Under Article 3(3) rome I, however, the choice of parties does not affect the application of the law of that other country, no agreement of which may be modified if all other elements relevant to the situation at the time of the election are in a country other than that whose law has been chosen. . .

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