Norton Rose City lawyer Charles Proctor has warned that creditors will have no legal right to reject payment made with the Euro, the new European single currency due to be introduced at the end of the decade.
Speaking at a conference in Cambridge, Proctor said that a creditor will have no valid claim for breach of contract if offered payment in the new currency.
“But while national currencies continue to exist in parallel with the Euro, the debtor may have an option to settle his debts either through the new money or a national currency,” added Proctor.
He also suggested that international law may come to the aid of the Euro.
Members of the European Union would have a sovereign right to adopt a common currency and to expect states outside the union to recognise that currency.
“A foreign court which held that a contract be terminated merely on the grounds that the Euro had replaced the relevant currency of obligation as means of settlement, would (it is suggested) place its home state in breach of international obligations,” said Proctor.
Courts in any state within or without the EU should recognise the Euro as legal tender for settlement of debts denominated in any former currency of a member EU state, added Proctor.