THE EFFECT OF CHANGING THE MONEY VALUE ON THE CONTRACTUAL OBLIGATIONS

Abstract

In periods of crisis, financial obligations become a continuing issue, mainly with regard currency depreciation or high inflation. Recently, a financial obligation has been defined as a legal obligation to pay a sum of a certain amount of money. However, these obligations can be flawed in terms of unfairness towards one of the two contracting parties. Therefore, the French, German and Anglo-Saxon jurisdictions have proposed incorporating an indexation clause called the "monetary valuation principle.” This means that the sum of returned money must be reevaluated on the return day according to indices stipulated previously in the contract between the two signatory parties. In this article, we are discussing this issue from the perception of Kuwaiti law.