Obligations to give money in foreign currency

The historical fragility of the Argentine macroeconomy allows us to conclude that inflationary debacles or devaluation are predictable and are in a latent state. Our courts already know it and for this reason, business lawyers must deeply study the case-law in matters of obligations in foreign currency when we draft any contract whose cancellation is intended to be made in US dollars, euros, pounds sterling or other hard currency. It should be noted that normally the transactions for which we usually seek shelter in foreign currency are operations of great magnitude (mutual mortgages, real estate sales, etc.) whose payment terms are usually settle down to three, five, ten or twenty years, which is an eternity in Argentina.

As business lawyers it will be important to expressly and precisely express in the contract the unrestricted and essential subjection to foreign currency, taking into account the objectives pursued and the operational context in which the parties act (which must be reflected in the “Recitals” of the contract), as well as all those scenarios that could directly or indirectly affect the economic-financial equation of the benefits provided by both parties.
The optimal scenario, then, will be to leave the fewest possible situations to chance outside the contract, in such a way as to ensure that our contractual counterpart sees limited chances of resorting at no cost to the exit clauses provided for in arts. 1076 to 1091 of the Code. Civ. and Comm. relating to the termination, modification and adaptation of the contract.