Vices of consent ICO Loans

About Vices of consent ICO Loans, all people remember that in the midst of the COVID-19 crisis, the Spanish Government launched lines of financing backed by the Official Credit Institute (ICO), in order to support companies and the self-employed at pandemic difficult time. These ICO loans were presented with the advantage of being largely guaranteed by the State, covering up to 80% of the loan amount in case the holder could not comply with the payments, but they ended up generating Vices of consent ICO Loans in a majority of cases.

Excusable error of consent

At the beginning of the granting of the ICO-Covid loans, the banks assured to their clients that the State would back 80% in the event of breach of contract, leaving the client responsible for the remaining 20%. However, many self-employed individuals and companies were unable to comply with the agreed payments and were required to pay 100% of the guarantee by the financial institutions.

Once the litigation has been served in the courts, there are already numerous sentences declaring that the guarantors are not obliged to respond for 80% of the ICO-Covid loan debt, so: the banks can only claim from the guarantors the remaining 20% of the loan that is not covered by the ICO guarantee, due to the clauses and the advertising of the ICO-Covid loans made the applicants understand that the State would assume 80% of the guarantee, and not 20%, a situation that generated an excusable error in the consent of the applicants, which has led the judges to appreciate a defect in the consent in the ICO Loans.

In summary: existed an error of vice which produced an erroneous conviction of what was being contracted, due to all contracting parties understood that they only assumed 20% of the debt in case of non-payment, since it was an ICO loan guaranteed by the Sapanish State and offered in the emergency decreed due to the pandemic.

If you are facing a problem due to vices of consent, contact us and we can help you. We always provide the best legal advice in Marbella about civil law.

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Resolution of First Instance Court No. 29 of Barcelona, Sentence 236/2023

Resolution of First Instance Court Nº 2 de A Estrada, Pontevedra, Sentence 41/2024