Contract provisionsTypes of contract
Describe the various types of private banking and wealth management contracts and their main features.
According to the principle of freedom of contract, Liechtenstein law does not provide for a conclusive list of private banking and wealth management contracts. In practice, there are various types of private banking and wealth management contracts, such as asset management agreements and investment advisory agreements. Banks and wealth management institutions use general terms and conditions applicable to the private banking contracts with clients.
Private banking contracts often contain a choice of law clause. Liechtenstein law only provides for limited restrictions on the validity of the choice of law clause, but, especially for consumer protection reasons, such restrictions exist.Liability standard
What is the liability standard provided for by law? Can it be varied by contract and what is the customary negotiated liability standard in your jurisdiction?
Liability for a breach of private banking contract under Liechtenstein law is provided by civil law. Clients may claim from banks or wealth management institutions compensation for damages caused by wilful or negligent breach of private banking contracts. The extent of the claim for damages depends on the fault (wilful or negligent). In the case of claiming damages by breach of contract, banks and wealth management institutions are required to prove that there is neither wilful nor negligent causation of damages. The liability of banks or wealth management institutions against consumers may only be excluded in the event of slight negligence behaviour. But also, in other cases, the exclusion of liability for wilful or gross negligence behaviour might not be valid.Mandatory legal provisions
Are any mandatory provisions imposed by law or regulation in private banking or wealth management contracts? Are there any mandatory requirements for any disclosure, notice, form or content of any of the private banking contract documentation?
Banks and investment firms must observe numerous and detailed rules of conduct, including rules on disclosure, notice, form and content thereof as stipulated in the BankG and VVG. Asset managers are specifically obliged to conclude a written agreement with clients on the rights and obligations and other conditions (article 18 of the VVG).Limitation period
What is the applicable limitation period for claims under a private banking or wealth management contract? Can the limitation period be varied contractually? How can the limitation period be tolled or waived?
The limitation period for claims in connection with the procurement of financial services transactions is three years from the date of knowledge of the damage and the party causing the damage, and in any event, 10 years of the date on which the transaction was effected or the service provided. The limitation period for potential other claims for damages in relation to a private banking or wealth management contract is three years from the date of knowledge of the damage and the party causing the damage and will be extended to 30 years in the case of specific criminal behaviour.
The waiver of the limitation period is not possible in advance - only under specific conditions upon the occurrence of damages.