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Credit Agreement

June 22, 2011 | 40,00 EUR | answered by Dr. Dr. Danjel-Philippe Newerla

If a reference rate of 1 Euro = 1.2078 USD is used for the repayment in a loan agreement. For example, if I repay 1000.00 USD today, how will the amount be calculated? Is it 1000.00 : 1.2078 = 827.95, or is the exchange rate of the day taken and multiplied by 1.2078? The loan agreement is in USD.

Dr. Dr. Danjel-Philippe Newerla

Dear Seeker,

Thank you for your inquiry. I would like to answer as follows:

The decisive course ultimately results from the contract.

There are basically two possibilities. Possibility number one is that a fixed rate is set (this is how I understood your inquiry). Possibility number two is that the rate is variable, so the rate at the respective due date is decisive.

This should result from the contract.

If the reference rate specified by you is given in the contract and no adjustment clause (i.e. no variable rate) has been agreed upon, the repayment amount in euros in the example you mentioned would indeed be 827.95 €.

I hope to have provided you with an initial legal orientation and wish you much success and all the best!

I would like to point out the following to you in conclusion:

The legal information I provided is based solely on the facts provided by you. My answer is only a first legal assessment of the situation, which cannot replace a comprehensive assessment of the facts. Adding or omitting relevant information can lead to a completely different legal assessment.

I hope that my explanations have been helpful to you. You are welcome to contact me through the follow-up option.

I wish you a pleasant Thursday afternoon!

Kind regards from the North Sea coast,

Dipl.-Jur. Danjel-Philippe Newerla, Attorney at Law

Stresemannstr. 46
27570 Bremerhaven
kanzlei.newerla@web.de
Fax.0471/140244
Tel. 0471/140240 or 0471/140241