Abstract

The breakdown of the par value system of the original Articles of the Fund and the failure of the Fund’s efforts to substitute a comparable system based on central rates are producing widespread effects in international and domestic law. Some of the consequences have been discussed in this pamphlet. The drafters of new legislation must take account of the existing situation, even if the legislation is not related to the Fund. The courts are called upon to interpret contracts that refer to par values in circumstances in which they will continue to exist according to the law of the Fund until the second amendment of the Articles becomes effective but in which they are irrelevant to actual exchange rates. Unsettled monetary conditions have contributed to the spread of “hardship clauses” in contracts. This phenomenon is seen as one that blurs the distinction between the formation and the execution of a contract and that modifies the principle that a contract establishes immutable rights and obligations between the parties. The contract establishes a relationship that produces adaptations of the contractual terms.