On 21 February 2013, the online publication Juridice.ro published an excerpt from the Supreme Court of Justice decision – 2nd Civil Section no. 3143 dated 12 June 2012, which stated that a bank could not invoke its internal regulations, if they were not known nor expressly accepted by a client, against a specific stipulation in the contract between the bank and the client.
In this case, the borrower and a co-debtor, both individuals, had concluded a credit agreement with a Bank. The agreement stipulated in art. 21.3 that the Bank would conclude a life insurance policy with a third party insurer to cover the risks arising in the event of the death of the borrower. The Bank concluded an insurance policy covering the risk related to the death of the co-debtor.
After the borrower’s death, his heirs requested that the Bank pay them the amount corresponding to the life insurance policy for the death of the borrower. The Bank responded that the life insurance policy had been concluded for the co-debtor, who had signed the respective policy, and that the Bank had done so based on an internal regulation. At the request of the heirs to see a copy of those internal regulations, the Bank said that its internal regulations are for its own exclusive use.
As a court of higher appeal, the Supreme Court of Justice stated that based on the provisions of art. 969 of the Old Civil Code (art. 1.270 of the New Civil Code), the stipulations of valid agreements are mandatory ad literam for the parties. Art. 21.3 of the credit agreement stated clearly the obligation of the Bank to conclude a life insurance policy covering the risks related to the death of the borrower, but the Bank concluded an insurance policy covering the risks related to the co-debtor.
The Supreme Court also stated that considering both the borrower and the co-debtor to have accepted the Bank’s internal regulations and the Bank concluding an insurance policy only in respect of the co-debtor would distort the obligations defined in art. 21.3. It also stated that such an interpretation should not be deemed to reflect the common understanding of the credit agreement by the parties.
The Supreme Court upheld, therefore, the claim of the borrower’s heirs to oblige the Bank to pay damages for failing to execute its obligations stipulated in art. 21.3 of the credit agreement.
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