Coronavirus - Legal Implications: Contracts and Bank Guarantees

[This article is part of a guide by Morais Leitão dedicated to the legal implications of the - at the time - new coronavirus.]

In the context of banking, the main issues seem to be concerned with the fulfilment of loan contracts by both the bank customer and the bank itself. The impact of the pandemic may be felt, from the outset, on the commonest types of direct bank lending contracts, i.e. term loan contracts and credit facility agreements, as well as bank guarantees, which are often referred to as “credit by signature” in banking jargon.

The main topics covered in this document are the following:

• Loans and credit facilities fully overdrawn
• Credit facility with overdraft available
• Bank guarantees
• Teh principle of good faith and compliance with loan contracts
• Decree-law 10-j/2020 - credit protection
• Personal guarantees provided by the state

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