Freedom of Contract in the European Financial Sector

Abstract This book shows that the freedom of contract of banks and other financial institutions is being restricted in various respects, by various means, and to an increasing extent. Often, it is the legislator who takes the lead in this, while at other times, it is the judge who serves as the main driver. Protecting the weaker party is quite generally regarded as a legitimate reason for restricting freedom of contract. It is usually also the reason for restricting the contractual freedom of the bank or other financial institution for the benefit of the (intended) counterparty, which is regarded as the weaker party in dealings with a financial institution. The freedom of contract of financial institutions is being curtailed not only in relation to consumers but also, increasingly, in relation to other parties considered in need of protection, such as small and medium-sized enterprises. Considerations other than protection of the weaker party also lead to considerable restrictions of the freedom of contract of financial institutions (and of their counterparties!). Examples of these considerations are the need to combat money laundering, terrorist financing, and tax evasion; comply with sanctions legislation; safeguard financial stability; protect human rights; and promote sustainability. While the primary jurisdictions discussed are the EU and the Netherlands, the book explores fundamental principles that will also be highly relevant to scholars and practitioners in other jurisdictions with regulated financial centres, such as the United Kingdom, the United States, Switzerland, Singapore, and Hong Kong.