xr Trans-Lex.org Law Research Trans-Lex.org Law Research - Docid: 954000 -

No. V.2.3 - Nominalistic principle

Unless otherwise agreed by the parties, a claim for payment in a certain currency entitles the creditor only to the contractually specified amount of that currency (nominal value), irrespective of any fluctuations of the currency in which the debt is expressed between the date of concluding the contract out of which the claim arises and the date of payment.

1 This Principle means that every debtor has to pay a monetary debt at its nominal value. Therefore, without any special agreement of the parties in their contract, each party carries the risk of currency depreciation if he is to receive under a contract a payment in a currency other than the currency of his home country.

2 Commentary No. 4 to Principle V.2.4 explains how the parties may cope with the exchange rate risk by inserting an exchange rate adjustment clause ("value-stabilization clause" or "index-linking clause") into their contract.

Please cite as: "Commentary to Trans-Lex Principle , http://www.trans-lex.org/954000"
Arbitral Awards
Hamburger Freundschaftliche Arbitrage, Award of May 2, 1977, YCA 1979, at 202 et seq.
ICC Award No. 505, World Trade, October 1932, at 11.
ICC Award No. 513, World Trade, October 1932, at 10 et seq.
ICC Award No. 519, World Trade, December 1932, at 11.
ICC Award No. 534, World Trade, February 1933, at 10 et seq.
ICC Award No. 536, World Trade, May 1933, at 11.
ICC Award No.1704, Clunet 1978, at 976 et seq.
Eckstein, Felix, Geldschuld und Geldwert im materiellen und internationalen Privatrecht (1932), p. 124 et seq.
Fouchard, Philippe, L'Arbitrage Commercial International, Paris 1965
Nussbaum, Arthur, Vertraglicher Schutz gegen Schwankungen des Geldwertes - Goldklauseln und andere Abreden zur Minderung des Valutarisikos, 1928
Proctor, Charles, Mann on the Legal Aspect of Money, Oxford 2005.
The Nominalistic Principle - A Legal Approach to Inflation, Deflation, Devaluation and Revaluation (1971), p 37 et seq.
van Houtte, Hans, Changed Circumstances and Pacta Sunt Servanda, in: Gaillard (ed.), Transnational Rules in International Commercial Arbitration (ICC Publ. Nr. 480,4), Paris 1993, at 105 et seq.
National Legislation
Nieuw Burgerlijk Wetboek - New Netherlands Civil Code ( Dutch Civil Code )
Contract Clauses
1. Contractual Clause Departing From Nominalistic Principle
Services Contract
Statements and Payments
Licensee shall (...) pay to X the royalties due with regard to the Licensed Products Sold in the respective quarter within X days from the date of issuance of the respective invoice by X (...) Payments to be made by Licensee to X under or in connection with this Agreement shall be paid in Euro to the following bank account (...) Royalties shall be paid in Euro. To the extent that the Net Selling Price for Licensed Products Sold by Licensee or its Subsidiaries outside the countries having Euro as their national currency is paid to Licensee other than in Euro, Licensee shall convert the portion of the royalty payable to X from such Net Selling Price into Euro at the official rate of exchange of the currency of the country from which the Net Selling Price was paid, as quoted by the US Wall Street Journal for the last business day of the calendar quarter in which such Licensed Products were sold. Should however, the inflation rate in a non Euro country exceed ten percent per month, the conversion shall be made at the official exchange rate on the day on which the Licensed Product was sold.
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