Dialectics of Freedom of Contract and Legal Paternalism: Regulation of Usurious Interest in a Consumer Credit Agreement

<jats:p>The relevance of the research is driven by the need to find a balance between the principle of freedom of contract and legal paternalism in the field of consumer lending. The article analyzes the evolution and modern mechanisms for regulating usurious interest. A comparative legal analysis of foreign jurisdictions regarding usurious loans is conducted. Particular attention is paid to the analysis of the Law of Ukraine No. 3498-IX, which introduced a mandatory maximum daily interest rate. The temporal aspects of the legislative changes, including the mechanism of the transition period and the peculiarities of applying new rules to different types of agreements, are investigated. Legal means for "adjusting" usurious terms, in particular through the institution of partial nullity, are revealed. It is demonstrated that the application of Article 217 of the Civil Code of Ukraine allows courts to exercise effective ex post control and serves as an effective instrument for protecting the weaker party. The practical significance of the study lies in the systematization of the legal consequences of violating the mandatory rule regarding the maximum daily interest rate and the formulation of recommendations for the judicial interpretation of norms on the nullity of terms in consumer credit agreements to ensure fairness and a balance of interests among financial market participants.</jats:p>