Part II The Private Law of Monetary Obligations, 6 The Interpretation of Monetary Obligations—Subsequent Uncertainty

Subject(s):

Financial system — Monetary system — Monetary obligations — Monetary union and monetary sovereignty

This chapter addresses situations where the money of account, though originally clearly defined, may become uncertain during the life of the legal relationship. This may occur in three categories of cases, namely: (a) where a system of law having some impact on the obligation or the parties to it purports to alter the money of account, (b) where a new monetary system emerges as a result of changes in territorial sovereignty, but the old monetary system continues to exist, and (c) where a monetary system becomes extinct. In cases involving changes in territorial sovereignty, the problem may have to be considered in a purely domestic context, where the obligation at issue was contracted by persons within the territory concerned and falls for consideration by a local court. Alternatively, the money of account may have been used in a cross-border contract and the subject may fall for consideration by a foreign court. In cases involving the extinction of a monetary system, it is necessary to examine two distinct types of situations. These include situations where a single monetary system is substituted for the outgoing currency, and those in which the extinct currency is replaced by two or more monetary systems.