Pennsylvania Act 1998-122 — COMMERCE AND TRADE (12 PA.C.S.) - AMEND EUROPEAN UNION MEMBER

Act text

COMMERCE AND TRADE (12 PA.C.S.) - AMEND EUROPEAN UNION MEMBER
                  Act of Dec. 3, 1998, P.L. 939, No. 122              Cl. 12
                             Session of 1998
                               No. 1998-122

     HB 2193

                                  AN ACT

     Amending Title 12 (Commerce and Trade) of the Pennsylvania
        Consolidated Statutes, providing for continuity of contract
        under the monetary union in member states of the European
        Union.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Title 12 of the Pennsylvania Consolidated
     Statutes is amended by adding a chapter to read:
                                CHAPTER 97
                             FOREIGN CURRENCY
     Sec.
     9701.  Continuity of contract under European monetary union.
      § 9701.  Continuity of contract under European monetary union.
        (a)  Continuity of contract.--
            (1)  If a subject or medium of payment of a contract,
        security or instrument is a currency that has been
        substituted or replaced by the euro, the euro shall be a
        commercially reasonable substitute and substantial equivalent
        that may be either:
                (i)  used in determining the value of that currency;
            or
                (ii)  tendered;
        in each case at the conversion rate specified in and
        otherwise calculated in accordance with the regulations
        adopted by the Council of the European Union.
            (2)  If a subject or medium of payment of a contract,
        security or instrument is the ECU, the euro will be a
        commercially reasonable substitute and substantial equivalent
        that may be either:
                (i)  used in determining the value of that currency;
            or
                (ii)  tendered;
        in each case at the conversion rate specified in and
        otherwise calculated in accordance with the regulations
        adopted by the Council of the European Union.
            (3)  Performance of any of the obligations described in
        paragraph (1) or (2) may be made in the currency or
        currencies originally designated in the contract, security or
        instrument, so long as the currency or currencies remain
        legal tender or in euro, but not in any other currency,
        whether or not the other currency:
                (i)  has been substituted or replaced by the euro; or
                (ii)  is a currency that is considered a denomination
            of the euro and has a fixed conversion rate with respect
            to the euro.
        (b)  Effect of currency substitution on performance.--None of
     the following shall have the effect of discharging or excusing
     performance under any contract, security or instrument or give a
     party the right unilaterally to alter or terminate any contract,
     security or instrument:
            (1)  Introduction of the euro.
            (2)  Tender of euros in connection with any obligation in
        compliance with subsection (a)(1) or (2).
            (3)  Determination of the value of any obligation in
        compliance with subsection (a)(1) or (2).
            (4)  Calculation or determination of the subject or
        medium of payment of a contract, security or instrument with
        reference to an interest rate or other basis that has been
        substituted or replaced due to the introduction of the euro
        and that is a commercially reasonable substitute and
        substantial equivalent.
        (c)  References to ECU in contracts.--When the euro first
     becomes the monetary unit of participating member states of the
     European Union, references to the ECU in a contract, security or
     instrument that also refers in substance to the definition of
     the ECU as set forth in subsection (g) shall be replaced by
     references to the euro at a rate of one euro to one ECU.
     References to the ECU in a contract, security or instrument
     without such a definition of the ECU shall be presumed,
     rebuttable by proof of the contrary intention of the parties, to
     be references to the currency basket that is from time to time
     used as the unit of account of the European Community.
        (d)  Effect of agreements.--This section shall not alter or
     impair and shall be subject to any agreements between parties
     with specific reference to the introduction of the euro.
        (e)  Application.--Notwithstanding the provisions of Title 13
     (relating to commercial code) or any other law of this
     Commonwealth, this section shall apply to all contracts,
     securities and instruments, including contracts with respect to
     commercial transactions, and shall not be deemed to be displaced
     by any other law of this Commonwealth.
        (f)  No application to other currency alteration.--In
     circumstances of currency alteration other than the introduction
     of the euro, this section shall not be interpreted as creating
     any negative inference or negative presumption regarding the
     validity or enforceability of contracts, securities or
     instruments denominated in whole or part in a currency affected
     by that alteration.
        (g)  Definitions.--As used in this section, the following
     words and phrases shall have the meanings given to them in this
     subsection:
        "ECU" or "European Currency Unit."  The currency basket that
     is from time to time used as the unit of account of the European
     Community, as defined in European Council Regulation No.3320/94.
        "Euro."  The currency of participating member states of the
     European Union that adopt a single currency in accordance with
     the Treaty on European Union signed February 7, 1992.
        "Introduction of the euro."  Includes, but is not limited to,
     the implementation from time to time of economic and monetary
     union in member states of the European Union in accordance with
     the Treaty on European Union signed February 7, 1992.
        Section 2.  The addition of 12 Pa.C.S. Ch. 97 shall apply to
     contracts, securities and instruments entered into or issued
     before, on or after the effective date of this act.
        Section 3.  This act shall take effect immediately.

     APPROVED--The 3rd day of December, A. D. 1998.

     THOMAS J. RIDGE