Termination of the contract is one way to terminate it. It is strictly regulated by law and can only follow established rules. It can also be used in the case of a loan agreement. Therefore, it is worth knowing who – the lender or borrower – can terminate the contract and in which cases he has the right to do so. The denunciation will entail certain legal consequences and obligations imposed on the parties.
What is termination of a loan agreement?
The termination of the contract is the notification of one of the parties that it has considered the contract to be terminated for some time, despite the fact that the provisions of the contract indicated a longer duration or it was concluded for an indefinite period. It should be noted that the termination of the contract does not reverse its legal effects and does not consider the contract to be non-existent. This is the normal termination of the contract, which does not release the parties from their obligations – they must complete them within the period of notice.
Can the borrower terminate the loan agreement?
Both the borrower and the lender have the right to terminate the loan agreement, unless the agreement provides otherwise. It is difficult to say what reasons for termination should guide the borrower, because in no case does this step release him from the obligation to repay the loan. It also makes little sense if the borrower repays the payday payday, which must normally be returned within 30 days – the same is the period of notice. Nevertheless, this right can be exercised, although in practice it does not occur, because it does not bring real benefits to the borrower – such that even an early repayment could bring.
When can the lender terminate the contract?
The lender has two options – he can terminate the contract with a notice period of 60 days or with immediate effect. Let’s take a closer look at the provisions of contracts in specific companies.
As you can see, the reasons for termination are given only in the event of termination with immediate effect. No reasons are given which may result in termination of the contract with a two-month notice period. However, the Act on Competition and Consumer Protection of 2016 (as amended) indicates that termination without a specific reason is unlawful. It must therefore be assumed that it cannot be based solely on the unilateral desire of the lender, and the termination must have a condition. Most often, the reason for termination is simply arrears or late payments. It is worth noting that the lender has no right to unilateral termination if the borrower has not been in arrears with payments. So you can see that Vivus does not break the rules and does not reserve the right to terminate without giving a reason.