Termination of an interest-free loan agreement for good cause

Facts

Erika Bertschinger Eicke, who calls herself Uriella, is the chairwoman of the association "Fiat Lux". X., a member of the association, granted Uriella seven interest-free loans totaling CHF 625,000 between 1994 and 1996. In 1997, X. left the association and demanded a reduction in the loan terms. When Uriella did not respond, X. sued her for repayment. The Cantonal and High Court of Appenzell Ausserrhoden ordered Uriella to repay the loans, as X. was entitled to terminate the loan agreements for good cause. The Federal Supreme Court dismissed Uriella's appeal.

Considerations

The Federal Supreme Court held that continuing contractual relationships such as loan agreements can generally be terminated prematurely for good cause, regardless of whether interest is owed or not. In the case of interest-free loans with long terms, the contract approaches a donation, as the lender provides the money based on a community of interests and close social relationship.

In the present case, X. was a significant member of "Fiat Lux" and had a close relationship of trust with the defendant Uriella. With X.'s withdrawal from the community, this…