Foreign Currency Obligations in the Bill of the Argentine Civil and Commercial Code

The bill originally drafted by the Commission created to such end (the “Commission”), in section 765 of the title on obligations to deliver sums of money, stated as follows: “An obligation to deliver sums of money is that of a debtor that owes a certain amount of currency, determined or to be determined, at the time of the creation of the obligation. If by the act that creates the obligation, it was agreed that a certain amount of currency which is not legal tender in Argentina will be delivered, the obligation must be considered as an obligation to deliver sums of money.” Consequently, the proposed section 766 regarding the debtor’s obligations, read as follows: “The debtor must deliver the stated amount of currency of the designated kind, regardless of whether it is legal tender in Argentina.”

The bill originally drafted by the Commission maintained the position of the current Civil Code, i.e., that foreign currency obligations must be considered “obligations to deliver sums of money”, which are to be complied with by delivering the committed foreign currency. On the contrary, the Bill, in the version proposed by the Argentine Government, changes this position, since foreign currency obligations are to be considered “obligations to deliver amounts of goods”, enabling the debtor to deliver the equivalent amount in currency which is legal tender (i.e. Argentine pesos).

In this regard, proposed section 765, in the version sent by the Argentine Government, states the following: “An obligation to deliver sums of money is that of a debtor that owes a certain amount of currency, determined or to be determined, at the time of the creation of the obligation. If by the act that creates the obligation, it was agreed that a certain amount of currency which is not legal tender in Argentina will be delivered, the obligation must be considered as an obligation to deliver amounts of goods and the debtor may release itself by delivering an equivalent amount of money which is legal tender.” The wording of section 766, in the version proposed by the Argentine Government, within the title referred to obligations to deliver amounts of money, states that “[t]he debtor’s obligation is to deliver the corresponding amount of the designated kind.”

The wording of proposed sections 765 and 766, considered together with other proposed sections of the Bill such as sections 7 and 962, may give rise to doubts as to their construction regarding the potential application to existing legal relations as well as to their effect on contracts made after the entering into effect of the Bill, when such be the case.