Exchange Loss Damages and the Uniform Foreign-Money Claims Act: The Emperor Hasn't All His Clothes
Journal of Law and Policy in International Business, Vol. 23, p. 1, 1992
100 Pages Posted: 19 Dec 2013 Last revised: 8 Dec 2016
Date Written: 1992
In 1989, the National Conference of Commissioners on Uniform State Laws approved a new Uniform Foreign-Money Claims Act. This Act is designed to change and clarify the law regarding judgments on obligations denominated in a foreign currency. It does so by recognizing that old rules preventing judgment in a foreign currency - developed in times of a strong dollar - are inappropriate. Unfortunately, in seeking fairness for plaintiffs when the U.S. dollar is weak, the Act replaces rigid old rules with stiff new rules that fail to address the basic issue of appropriate damages for exchange rate losses. While the Uniform Act acknowledges the lessons available from England and New Zealand in their common law approach to the problem, it fails adequately to apply those lessons. This Article reviews the history of damages law (particularly in contract cases), discusses the lessons of common law change in England and New Zealand, reviews the Uniform Act, and offers an amendment that both takes account of the lessons to be learned from others' efforts and creates rules aimed at properly compensating for exchange loss damages in all situations.
Keywords: Uniform Foreign-Money Claims Act, exchange rate losses, damages, international law, common law, U.S. dollar, foreign currency, legislative reform
JEL Classification: K19, K33
Suggested Citation: Suggested Citation