05 Ene 24 Bill of Law: Modifications to the National Civil and Commercial Code of the Argentine Republic

Agustín Cerolini, Matías Ferrari, Natalia Artmann, Aranza Solis and Julieta Sica

On December 27, 2023 the Bill for Bases and Starting Points for the Freedom of Argentines (the “Bill”) was introduced to the Argentine National Congress by the Executive Power (the “PEN” for its acronym in Spanish). Among the issues set out, in TITLE V – JUSTICE Chapter III the Bill proposes amendments to the National Civil and Commercial Code (the «CCCN» for its acronym in Spanish).

Throughout the proposed reforms, it mainly suppresses any reference to «causes contrary to morality, public order or good customs», or to «immoral» causes or motives. It also deepens, as introduced in the Decree 70/2023 (the «Decree«), the principle of freedom of contract.

Judicial powers: The Bill proposes to replace article 771 related to the judicial power to reduce interest ex officio. In this sense, such reduction may only be exercised at the request of a party that is not in default.

Default: The Bill proposes to amend:

i. Article 887, which provides for two exceptions to the principle of automatic default; both were amended.

subparagraph a). Subject to a tacit term. In this case, the text suggests clarifying from when the creditor must call upon the debtor to constitute the debtor in default.

subparagraph (b). Subject to an indefinite period of time. In this case, the text suggests deleting the phrase «no time limit«. Specifically, there is a time limit, but it is indeterminate.

ii. Article 888, which provides for exemption from the effects of default. The text proposes inserting a paragraph stating: «the debtor is not in default if the other party is in default or if it fails to comply with its own provision«.

Preliminary contracts: The Bill proposes to delete the second paragraph of article 994 related to the period of validity of promises, established as equal to or less than one year, thus allowing much longer periods to be determined.

Contracts between spouses: The Bill proposes to repeal the prohibition between spouses to contract with each other under the community property regime provided for in article1004 subsection d).

Legal acts: The Bill proposes a new wording of article 1004 by deleting acts contrary to morality, public order and the dignity of the human person as prohibited objects of contracts.

Long-term contracts: The text proposes to modify the wording of article 1011, thus eliminating the requirement to renegotiate the contract prior to termination.

Unlawful cause: The Bill proposes to delete the subsection that qualifies as unlawful a contract whose cause is contrary to morals, good customs or public order.

Regime of actions: The text proposes to modify the wording of article 1056 in order to allow the purchaser to demand the termination or reduction of the price in contracts with hidden defects, i.e. to exercise the redhibitory action quanti minoris.

Imprevision: The Bill proposes to modify article 1091, adding in its final part that the party sued for suitability can request the termination of the contract, although it establishes that neither the termination nor the suitability will proceed if the aggrieved party acted with fault or is in default.

Transfer agreement: The Bill gives the parties the possibility of agreeing or not the non-transferability of the preference.

Generic term: The Bill includes in article 2560 acts of corruption of public officials together with crimes against humanity as imprescriptible. It also establishes that the 5-year term applies to all tax credits, regardless of their origin.