Commentary on the modifications made by DNU 70/2023 to Sections 765; 766; 958; 960, and 989 of the CCyCN.
The rule in comment, within its considerations, indicates that civil relations need to be freed from excessive paternalistic regulations. Thus, referring to Section 1197 of the Civil Code of Vélez, the decree expresses that the principle established there by which the agreements made in contracts formed a rule for the parties to which they had to submit as to the law itself, was over the years undermined by successive regulatory theories that disbelieved in the individuals’ ability to determine their own destiny, and that the State was in better conditions than the individuals to know what they needed. It is added that the current Civil and Commercial Code of the Nation (CCyCN) included imperative norms that prevent the parties from deciding on the form, content, and execution of the contracts, sometimes imposing excessive requirements for the validity of those agreements. That, in this framework, it is necessary to modify the regulations of the CCyCN that obstruct the exercise of individual freedoms in the contractual field.
Based on what has been previously indicated, the DNU PEN 70/23 amends certain Sections of the obligations in the CCyCN. Thus, in its Section 250, it stipulates the modification of section 765 of the CCyCN with the following text:
“Section 765.- Concept. The obligation is to give money if the debtor owes a certain amount of currency, determined or determinable, at the time of the establishment of the obligation, whether or not it is legal tender in the country. The debtor is only released if he delivers the amounts committed in the agreed currency. Judges cannot modify the form of payment or the currency agreed upon by the parties.”
The new text of the mentioned rule adds the possibility for the debtor to commit to paying a certain amount of money, whether it is legal tender in the country or not. Also, the modification removes from its previous wording the following text: “If by the act by which the obligation was constituted, it was stipulated to give currency that is not legal tender in the Republic, the obligation must be considered as giving quantities of things, and the debtor can free himself by giving the equivalent in legal tender.” These modifications imply that, from the effectiveness of the new legal text, obligations assumed in money that is not legal tender in the country will be considered – just like obligations assumed in legal tender – as obligations to give sums of money and no longer to give quantities of things, as postulated by the original section 765 CCyCN.
On the other hand, the new text added to the new section 765 CCyCN states the following:”The debtor is only released if he delivers the amounts committed in the agreed currency. Judges cannot modify the form of payment or the currency agreed upon by the parties.” This reaffirms the idea of turning the obligation assumed in money that is not legal tender into an obligation to give a sum of money, also prohibiting judges from modifying both the form of payment and the currency agreed upon by the parties. Although section 765 CCyCN is included in the paragraph corresponding to “Obligations to give money,” the previous text clearly indicated that obligations to give currency that is not legal tender in the Republic were considered obligations to give quantities of things. Now, following the discussed reform, there are no longer any doubts that the obligation assumed in money that is not legal tender in the Republic is an obligation to give a sum of money as established by section 617 of the Civil Code of Vélez (conf. Law No. 23.928) and that the debtor is released by delivering the sum in the committed form.
However, section 766 CCyCN, also modified by the decree in question, continues to stipulate that: “The debtor must deliver the corresponding amount of the designated species, whether the currency is legal tender in the Republic or not.” While the new text clearly intends to reaffirm that obligations assumed in money that is not legal tender must be paid in the agreed currency, the new wording still retains a reference to an obligation to give things (a generic obligation – section 762 CCyCN) despite the fact that, as mentioned above, there is no doubt that with the modification it is now an obligation to give sums of money.
In conclusion, regardless of the aforementioned, there is no doubt about the clear intention and purpose of the reform. Obligations agreed upon in foreign currency must be fulfilled by paying sums of money in that currency, and the debtor can no longer free himself by giving the equivalent in legal tender. However, it should be remembered that as of this date, restrictions on the free exchange market remain in place, so it will be necessary to eliminate such restrictions for the new legal text to have the desired effects.
Furthermore, the aforementioned decree modifies some Sections of the general part of contracts in the CCyCN. Thus, the text of section 958 CCyCN is replaced by the following: “Freedom of Contract. Parties are free to enter into a contract and determine its content, within the limits imposed by law or public order. Legal norms are always supplementary to the will of the parties expressed in the contract, even if the law does not expressly determine this for a specific type of contract, unless the norm is expressly imperative, and always with a restrictive interpretation.” This modification removes from the original text the limit framed within “morality and good customs,” eliminating any subjective interpretation of the contract. Moreover, the following is added to the text of the mentioned Section: “Legal norms are always supplementary to the will of the parties expressed in the contract, even if the law does not expressly determine this for a specific type of contract, unless the norm is expressly imperative, and always with a restrictive interpretation.” This last addition, already largely set out in the current and unmodified section 962 CCyCN, reaffirms the principle of pacta sunt servanda (sections 959 CCyCN and 1197 Civil Code of Vélez). The rule, then, just like until now – I clarify -, is regarding the the conventional agreement is the norm, and its modification is the exception.
Parties may agree not following the text of the law, except when it is imperative. The text of section 962 CCyCN was not suppressed or modified, so its original wording is maintained, which also establishes that legal norms related to contracts are supplementary to the will of the parties unless their mode of expression, content, or context indicates that they are indisputable, meaning their application is imperative as stated in the new text of section 958.
Additionally, the modification to section 960 CCyCN is added, whose new text states: “Powers of the judges. Judges do not have the power to modify the stipulations of contracts, except at the request of one of the parties when authorized by law.” The new text eliminates the possibility for the judge to, on their own initiative, modify any contractual stipulation agreed upon by the parties, even if there might be conventions contrary to public order. However, nothing prevents judges from declaring null any clause of the contract or even the total and absolute nullity of it.
Furthermore, the decree amends Section 989 of the CCyCN, replacing it with the following text: “Judicial control of abusive clauses. The administrative approval of general clauses does not prevent their judicial control.” This modification removes from the original text the possibility that the judge, in the case of a partial nullity of the contract, must simultaneously integrate it if it cannot survive without compromising its purpose.
In conclusion, the discussed amendments clearly aim to prohibit judges from supplanting the will of the parties by modifying or integrating the contract. However, it should be noted that, in the case of a partial nullity of a clause that affects the purpose of the contract, and as the judge no longer has the power to integrate it, the parties must, for example, during the execution stage of the sentence, agree on a new clause that can keep the contract alive, or otherwise, the contract should be resolved due to the frustration of its purpose (Section 1090 CCyCN).
Lastly, it is worth mentioning that, in our view, these modifications do not affect contracts made within the framework of a consumer relationship, whose content must always respect public order and the limitations contained in Law 24.240, in the CCyCN, and in Section 42 of the National Constitution, for the benefit of consumers and users, avoiding abuses that suppliers of goods and services might commit as the stronger party in the contractual relationship.