Part II The Private Law of Monetary Obligations, 3 The Character of Monetary Obligations

Subject(s):

Monetary system — Money and inter-state obligations — Monetary obligations

This chapter evaluates the character of monetary obligations. Monetary obligations primarily exist where the debtor is bound to pay a fixed, certain specific, or liquidated sum of money. This definition presupposes that money is to be paid in the sense of a medium of exchange or in a similar monetary context, for example, where a bank advances a loan to its customer. So far as English law is concerned, a monetary obligation cannot become impossible to perform—whether expressed in sterling or a foreign currency. Circumstances peculiar to the debtor, such as his poverty, is ongoing attempts to negotiate an overall restructuring of his indebtedness, his inability to raise the anticipated financing for the transaction, or the inability to access the intended source of funds will not relieve the debtor of his monetary obligation. Likewise, the depreciation of the market value of the money of account as against other currencies will only in extreme circumstances result in the application of the doctrine of frustration under English law.