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Where a monetary obligation is not expressed in a particular currency, payment must be made in the currency of the place where payment is to be made. 

 


COMMENT


Determining the currency of payment gives rise to a special problem if the contract does not state the currency in which a monetary obligation is due. Although such cases may be infrequent, they do exist; a contract may for example state that the price will be the “current price”, or that it will be determined by a third person, or that some expenses or costs will be reimbursed by one party to the other, without specifying in which currency those sums are due. The rule laid down in Article 6.1.10 is that in such situations payment must be made in the currency of the place where payment is to be made.

 

Article 6.1.10 is not concerned with the currency in which damages are to be assessed, a matter dealt with in Article 7.4.12 in the context of non-performance.

 

Illustration

 

A, a Japanese client, instructs its broker, B, to buy shares on the Shanghai stock exchange. If B pays for them in Chinese Yuan Renminbi (CNY), should A be billed in Yuan Renminbi or in Japanese Yen? If A is to pay B in Japan, it will pay in Yen.

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