Spain’s Supreme Court keeps explaining Floor Clauses in Mortgage contracts: No agreement can eliminate effects of nullity

What is null and void cannot bring any effect or as the Roman’s used to say “Quod null est, nullum effectum producit”

When a clause is null and void, it is null from day 1 of its existence and all effects derived from its inclusion on a contract, need to be reversed as they should have never happened, according to Law.

Talking about floor clauses: interest charged by the existence of a clause to override the fall in the Euribor are the effects of a null and void clause and therefore should have never been charged to the mortgage debtor.

The Supreme Court in Spain has recently passed an interesting decision on this where it specifies that any intermediate agreement does not transform the clause to become valid.

Therefore and in that case, despite the fact that the clause was modified by the bank by request of the client, this does not imply the client lost his rights to claim for all overcharged interest from the start of the mortgage.

A great Court decision especially for those who are being pressurized by the Bank and signed a compromising agreement where a refund was not included.

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