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Loan Assumption Agreement for Switzerland

Loan Assumption Agreement Template for Switzerland

A Swiss law-governed agreement that facilitates the transfer of loan obligations from an original borrower to a new party (the assuming party). The document, governed by the Swiss Code of Obligations, outlines the terms and conditions under which the new party assumes responsibility for an existing loan, including the rights and obligations of all parties involved, payment terms, and any security arrangements. It addresses the release of the original borrower, the assumption of obligations by the new party, and ensures compliance with Swiss banking and financial regulations where applicable.

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What is a Loan Assumption Agreement?

The Loan Assumption Agreement is a crucial document in Swiss financial transactions where an existing loan obligation needs to be transferred to a new party. This typically occurs in situations such as property sales where the buyer assumes the seller's mortgage, corporate restructurings, or business acquisitions where existing debt is transferred. The agreement, governed by Swiss law, particularly the Code of Obligations (OR/CO), must carefully detail the assumption process, including the transfer of rights and obligations, any modifications to the original loan terms, and the conditions for releasing the original borrower. The document is essential for maintaining clear records of debt obligations and ensuring all parties understand their rights and responsibilities under Swiss law. The agreement must address specific Swiss legal requirements regarding debt assumption, including any necessary regulatory approvals, especially if the loan involves regulated financial institutions.

What sections should be included in a Loan Assumption Agreement?

1. Parties: Identification of the original lender, original borrower, and the assuming party

2. Background: Context of the original loan and the reason for the assumption

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Details: Description of the original loan being assumed, including amount, interest rate, and payment terms

5. Assumption: Core provisions regarding the assumption of the loan obligations by the assuming party

6. Representations and Warranties: Statements of fact and assurances from all parties

7. Continuing Obligations: Ongoing responsibilities of each party after the assumption

8. Conditions Precedent: Conditions that must be satisfied before the assumption becomes effective

9. Release of Original Borrower: Terms of release of the original borrower from loan obligations

10. Payments and Calculations: Details of how payments will be made and calculated post-assumption

11. Governing Law and Jurisdiction: Specification of Swiss law as governing law and jurisdiction for disputes

12. Notices: Process and requirements for formal communications between parties

13. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments

What sections are optional to include in a Loan Assumption Agreement?

1. Security Arrangements: Required if the loan involves collateral or security interests that need to be transferred or modified

2. Guarantees: Required if there are third-party guarantees that need to be addressed or new guarantees to be established

3. Regulatory Compliance: Required if the loan involves regulated entities or activities requiring specific compliance provisions

4. Tax Provisions: Required if there are specific tax implications or arrangements that need to be addressed

5. Insurance Requirements: Required if specific insurance must be maintained by the assuming party

6. Step-In Rights: Required if the lender needs specific rights to take control in certain circumstances

7. Cross-Default Provisions: Required if the loan is part of a larger financing arrangement with cross-default implications

What schedules should be included in a Loan Assumption Agreement?

1. Original Loan Agreement: Copy or summary of the original loan agreement being assumed

2. Loan Details Schedule: Detailed breakdown of the loan amount, interest rates, payment schedule, and any adjustments

3. Security Details: List and description of any security or collateral associated with the loan

4. Payment Schedule: Detailed schedule of payments including principal and interest calculations

5. Required Consents: Copies of any third-party consents required for the assumption

6. Compliance Certificates: Forms of any compliance certificates required under the agreement

7. Contact Details: Contact information for all parties and their representatives

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Switzerland

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions




































Clauses































Relevant Industries

Banking & Financial Services

Real Estate

Corporate Finance

Construction

Infrastructure

Commercial Property

Retail

Manufacturing

Healthcare

Hospitality

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Real Estate

Corporate Finance

Debt Management

Banking Operations

Property Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Loan Officer

Credit Manager

Risk Manager

Real Estate Manager

Property Manager

Compliance Officer

Financial Controller

Banking Relationship Manager

Debt Management Officer

Corporate Finance Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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