International Contracts and Currency Fluctuations

Transcription

1 Andreas Meidell International Contracts and Currency Fluctuations CAPPELEN AKADEMISK FORLAG

2 Contents 1 INTRODUCTION The subject Currency risks Special challenges of the subject Characteristics of international monetary obligations Applicable law? The problems to be examined - Overview 27 2 GENERAL ASPECTS OF CURRENCIES AND EXCHANGE RATE FLUCTUATIONS The occurrence of currency exchange rate fluctuations Introduction r The exchange rate explained Political control of exchange rates International monetary cooperation Introduction The International Monetary Fund (IMF) European Monetary Union (EMU) and the Euro Introduction The need for a common currency in the EU The launch of the Euro - institutions of the EMU, The Euro as legal tender - some practical problems 37 3 MONETARY NOMINALISM Introduction 40

3 INTERNATIONAL CONTRACTS AND CURRENCY FLUCTUATIONS 3.2 General remarks Definition and nature of the principle of monetary nominalism Competing concepts: metallism and valorism The purpose of monetary nominalism Legal effects of monetary nominalism The application and legal status of nominalism in anational law A general principle - dissemination in national laws Monetary nominalism as a principle of anational law Discussion: What are the purposes of monetary nominalism and what interests does it serve when applied to international transactions? Conclusion 50 DETERMINATION AND CONVERSION OF DEBT CURRENCIES Introduction Presentation of the problems The purpose of the determinations Determination of the currency of account The agreed currency of account Ambiguous denotations of currency Subsequent uncertainties caused by the abolishment of a currency The currency of account in absence of agreement Determination of the currency of payment, The currency of payment distinguished from currency of an award The agreed currency of payment The currency of payment in the absence of agreement Determination of the exchange rate for conversion Introduction The date of the conversion rate 68 10

4 CONTENTS The place of the applicable exchange rate Types of exchange rate 73 5 PROTECTION AGAINST CURRENCY EXCHANGE RATE FLUCTUATIONS Introduction Protection provided by the parties Leading and lagging Foreign currency accounts and netting Exchange rate clauses Multi-currency clauses and currency baskets Maintenance of value clauses Price reservation clauses Hardship clauses Protection provided by the foreign exchange market Introduction Forward exchange contracts Currency futures Currency options Currency swaps Derivatives Exchange rate insurance 91 6 COMPENSATION FOR EXCHANGE LOSSES CAUSED BY CURRENCY EXCHANGE RATE FLUCTUATIONS The problem The currency in which to assess damages The problems and possible solutions Choice of the most appropriate currency Determination of the conversion rate Delayed payments Reimbursements Compensation by means of interest and damages Introduction The award of default interest Damages for exchange losses Conclusions ;._:... ^

5 INTERNATIONAL CONTRACTS AND CURRENCY FLUCTUATIONS 7 SOME REMARKS ON THE COLLECTION OF DEBTS IN FOREIGN CURRENCIES ; Introduction Judgements expressed in foreign currencies Set-off of obligations expressed in different currencies Foreign currency obligations in insolvency proceedings CONTRACTUAL REMEDIES AS RESPONSES TO EXCHANGE RATE FLUCTUATIONS Subsequent events and contractual remedies Currency fluctuations as a subsequent event The impact of clausula rebus sic stantibus The available contractual remedies Monetary nominalism and currency risk speculation CONTRACTUAL CLAUSES ON REMEDIES AGAINST CURRENCY EXCHANGE RATE FLUCTUATIONS Introduction Special risk clauses General clauses on changed circumstances Conclusions CONTRACT ADAPTATION AS RESPONSE TO CURRENCY EXCHANGE RATE FLUCTUATIONS Introduction The legal basis for contract adaptation The problem National doctrines on contract adaptation Introduction The Scandinavian "generalklausul - Avtaleloven 36" Frustration of contracts BGB Wegfall der Geschaftsgrundlage Imprevision Some comparisons Anational sources Conclusions

6 CONTENTS 10.3 Currency fluctuations as a cause for contract adaptation Point of departure Exchange rate fluctuations as an event Considerable disparity between exchange rates The effect on the equilibrium of the contract.j Subsequent and unforeseeable exchange rate fluctuations.* External and unavoidable events The assumptions of the parties The "reasonableness test" i Some conclusions Procedures of contract adaptation Introduction Renegotiation and mediation Conciliation and revision Resort to court or arbitration Modes of contract adaptation Point of departure " Modification of contractual terms Adding new terms TERMINATION OF CONTRACT AS RESPONSE TO CURRENCY EXCHANGE RATE FLUCTUATIONS Introduction Problem and definition Termination compared to adaptation The legal basis for contract termination in anational law? Currency fluctuations as a cause for termination The requirements The impact of a more dramatic effect The "reasonableness test" Procedures and modes for termination Renegotiation Resort to courts or arbitration to determine the effects of termination. % Restitution ^

7 INTERNATIONAL CONTRACTS AND CURRENCY FLUCTUATIONS May termination be avoided by offering adaptation? EXEMPTION FROM CONTRACTUAL LIABILITY FOR NON-PERFORMANCE Introduction The problem and legal basis for liability exemption Exemption from liability as compared to termination Currency fluctuations as a cause for exemption Currency fluctuations as impediment Unforeseeability and unavoidability of currency fluctuations Failure of a third party,.. / Effects of the exemption Exemption from liability Temporary or final exemptions CONCLUSIONS 213 Table of abbreviations 219 Table of cases 223 Table of literature with abbreviations 226 Index 236