A European exporter with a long-term supply agreement governed by Argentine law receives notice that its counterparty intends to suspend deliveries. The stated reason: an economic shock – currency collapse, import restrictions, or a sudden regulatory freeze – has made performance commercially impossible. The exporter's in-house counsel opens the contract and finds a standard force majeure clause. The question is whether Argentine courts will treat the situation as a genuine excuse for non-performance, as a trigger for renegotiation, or as a straightforward breach carrying full liability.
Force majeure and hardship in Argentina are governed by the civil and commercial legislation consolidated in the Código Civil y Comercial de la Nación (Civil and Commercial Code of Argentina). This distinguishes between objective impossibility of performance and an extraordinary change of circumstances rendering performance excessively burdensome. The former extinguishes the obligation; the latter – known as imprevisión (hardship doctrine) – entitles the affected party to seek judicial or agreed revision of contract terms. Both doctrines have been extensively litigated before Argentine courts, producing a body of case law that frequently diverges from the literal text of the legislation.
This analysis examines the doctrinal foundations of each regime, the gap between statute and judicial practice, the strategic options available to international businesses facing disruption. Cross-border implications for parties operating between Argentina and other Americas jurisdictions, and the regulatory outlook ahead.
Doctrinal foundations: impossibility, imprevisión, and the civil and commercial code
Argentine commercial legislation rests on a civil law tradition that carefully separates the concept of impossibility from the concept of excessive onerousness. Understanding this separation is essential before any contractual strategy can be designed.
Force majeure and objective impossibility. Under Argentine civil and commercial legislation. A party is released from an obligation when performance becomes objectively impossible due to an event that is external to the debtor, unforeseeable at the time of contracting, and irresistible in its effects. The three elements – externality, unforeseeability, and irresistibility – are cumulative. A party that can demonstrate all three is entitled to claim full discharge of the obligation without liability for damages.
The practical consequence is significant. Once a court recognises force majeure, the obligor is not merely excused from timely performance. The obligation itself is extinguished. This is a stronger remedy than a simple suspension of performance, and it has direct implications for how a statement of claim is framed when the dispute reaches litigation.
Argentine courts have consistently held that economic hardship alone – rising input costs, currency depreciation, or market disruption – does not satisfy the irresistibility requirement. Performance that has become expensive is not performance that has become impossible. The court filing strategy therefore diverges sharply depending on whether the affected party seeks total discharge or contract revision.
Imprevisión – the hardship doctrine. The imprevisión doctrine addresses the second scenario: performance that remains physically possible but has become excessively burdensome due to an extraordinary and unforeseeable alteration of circumstances. The legislation permits the affected party to request either rescission of the contract or its adaptation to the new circumstances. Crucially, the counterparty may avoid rescission by offering a fair adjustment of the terms.
This regime is explicitly bilateral in design. Neither party is automatically entitled to walk away. The preferred outcome under Argentine commercial legislation is renegotiation, with judicial intervention as a backstop when parties cannot agree. In practice, courts in Buenos Aires have shown a strong preference for ordering contractual adaptation over rescission, particularly in long-term commercial relationships.
The threshold for invoking imprevisión is materially higher than many international clients expect. The change of circumstances must be extraordinary – outside the normal range of risks that a reasonable commercial party in Argentina would anticipate. Given Argentina's historical record of economic volatility, courts have been reluctant to treat inflation, devaluation, or even periodic exchange controls as extraordinary. The risk of macro-economic instability, the courts reason, is a foreseeable feature of contracting in Argentina. A party that did not price that risk into the agreement has a weaker claim.
Competing court interpretations: where statute and practice diverge
The gap between the written legislation and actual judicial outcomes in Argentina is wide. International clients accustomed to common law predictability – or to the more codified civil law systems of continental Europe – frequently underestimate how much discretion Argentine judges exercise.
The foreseeability question. Courts in Argentina are divided on what foreseeability means in the context of a macro-economic event. One line of decisions holds that a general awareness of Argentina's economic instability is not the same as foreseeability of a specific crisis. Under this approach, a dramatic and sudden devaluation. of the kind that has occurred multiple times in Argentine history. can qualify as an unforeseeable event for imprevisión purposes. Even though exchange-rate risk in general was known to the parties.
A competing line of decisions takes the opposite view. Because Argentina has experienced recurrent devaluations, import restrictions, and sovereign debt restructurings, a commercially sophisticated party that entered a long-term peso-denominated agreement must be taken to have accepted that risk. Under this reasoning, imprevisión is available only for truly novel events – not for another iteration of a pattern that Argentine contract parties have experienced repeatedly.
The Cámara Nacional de Apelaciones en lo Comercial (National Commercial Court of Appeals of Argentina) has not issued a uniform resolution on this divide. The outcome therefore depends substantially on the specific court, the nature of the industry, and the contractual context. This uncertainty creates real risk for parties who defer legal advice until a crisis is already under way.
The adaptation remedy in practice. When courts order contractual adaptation rather than rescission, they face a second layer of difficulty: determining what the adapted terms should be. Argentine commercial legislation provides no formula. Judges have used a range of approaches – indexing to official inflation rates, ordering price renegotiation within a judicially set corridor, or appointing expert accountants to propose revised terms.
Practitioners in Argentina note that the adaptation process can extend litigation considerably. A party that files a statement of claim for imprevisión adaptation should plan for a multi-year process. An interim injunction preserving the contractual relationship pending final judgment is often the most critical early step, because without it the counterparty may treat the dispute as a de facto termination and act accordingly.
Force majeure and currency controls. The recurring cycles of Argentine exchange controls have generated a distinct body of case law on whether regulatory intervention constitutes force majeure. Courts have generally accepted that a government prohibition on transferring foreign currency abroad – when it directly prevents performance of a cross-border payment obligation – can satisfy the externality and irresistibility requirements. However, the unforeseeability requirement remains contested. Courts have scrutinised whether the prohibition was in place or foreseeable at the time of contracting, and whether the parties included a contingency clause to address that risk.
For international clients, this means that a cross-border supply or financing agreement that was silent on exchange controls may be vulnerable to a force majeure defence by the Argentine counterparty. Equally, the foreign creditor may find that judgment enforcement against Argentine assets is complicated by the same regulatory restrictions that gave rise to the dispute. The intersection of substantive contract law and civil procedure – including the mechanics of court filing, asset attachment, and interim injunction proceedings – becomes critical at this stage.
For a comparison of how these issues are handled in the US legal system. See our analysis of force majeure and hardship in the United States. This highlights key structural differences for parties operating across both jurisdictions.
To receive an expert assessment of force majeure or hardship claims under Argentine law, contact us at info@ferrazwhitmore.com.
Strategic options for international businesses facing disruption in Argentina
When a counterparty in Argentina signals an intention to invoke force majeure or imprevisión, the international business faces a decision tree that must be worked through quickly. Delay is costly: Argentine civil procedure rules impose strict deadlines on provisional measures, and courts are less receptive to interim relief requests that arrive well after the triggering event.
Assessing the applicable doctrine. The first step is to characterise the disruption correctly. If the counterparty's performance has become physically impossible, force majeure is the relevant doctrine. If performance is still possible but economically catastrophic for the counterparty, imprevisión is more likely to be invoked. The two doctrines lead to different legal outcomes and require different litigation strategies.
A party resisting a force majeure claim should challenge at least one of the three required elements: externality, unforeseeability, or irresistibility. The most productive challenge is usually unforeseeability. Gathering evidence that the relevant risk was discussed during contract negotiations – or was flagged in industry reports available at the time – can defeat the claim at its threshold.
A party resisting an imprevisión claim should focus on whether the change of circumstances was truly extraordinary or merely a foreseeable fluctuation within the normal risk profile of Argentine commercial activity. Evidence of the parties' risk allocation – including stabilisation clauses, currency hedging arrangements, or explicit price-adjustment mechanisms – is directly relevant.
Renegotiation as a strategic tool. Argentine commercial legislation creates an incentive to negotiate before litigating. A counterparty that offers a reasonable contractual adjustment can defeat a rescission claim brought under imprevisión. This means that a well-timed renegotiation offer. even one that concedes some ground on price or timeline. may be preferable to full litigation. This carries the risk that a court will order an adaptation on terms less favourable than a negotiated outcome.
In practice, the renegotiation window is often short. Once a party files a court action, positions harden and the costs of settlement increase. International clients with experience in common law systems sometimes assume that filing a statement of claim is a neutral first step that leaves room for settlement. Under Argentine civil procedure, a filed claim activates mandatory procedural timelines and triggers cost consequences that affect settlement dynamics from day one.
Interim injunctions and asset preservation. Where the international business is the creditor – seeking to hold the Argentine counterparty to its obligations – an interim injunction is the primary defensive tool. Argentine civil procedure allows courts to order provisional measures including the attachment of assets, the freezing of bank accounts, and the suspension of actions that would make final relief illusory.
The standard for obtaining an interim injunction in Argentine courts requires a showing of apparent right (verosimilitud del derecho – appearance of a valid claim in Argentine civil procedure) and imminent harm. Both elements must be supported by documentary evidence at the time of filing. Courts do not grant interim injunctions on the basis of oral submissions or unverified assertions. The quality of the initial court filing therefore determines whether provisional protection is secured at all.
Parties seeking litigation and arbitration support in Argentina should ensure that counsel experienced in local civil procedure rules is engaged before the first procedural step is taken. not after the first hearing has been lost.
Arbitration clauses and their interaction with force majeure defences. Many international commercial agreements with Argentine counterparties contain international arbitration clauses, typically providing for ICC or ICSID arbitration seated outside Argentina. A force majeure or imprevisión defence does not suspend an arbitration clause. The Argentine party must still respond to arbitral proceedings, and the arbitral tribunal will apply whatever law governs the contract.
If the governing law is Argentine civil and commercial legislation, the tribunal will apply the same doctrinal rules described above. If the governing law is another system – New York law, English law, or a neutral third-country law – the Argentine party's attempt to invoke local force majeure doctrine may face significant resistance. International arbitral tribunals have generally been sceptical of forum-specific hardship defences that the contracting parties did not expressly incorporate.
To discuss how force majeure and hardship provisions interact with your specific contract structure in Argentina, reach out to info@ferrazwhitmore.com.
Cross-border implications for Americas clients
For businesses operating across multiple Latin American jurisdictions – or between Argentina and trading partners in North America or Europe – the Argentine force majeure and imprevisión regimes create specific cross-border complications.
Judgment enforcement across borders. A foreign creditor that obtains a judgment against an Argentine counterparty faces the challenge of enforcement. Argentine commercial legislation and civil procedure rules provide a mechanism for recognising foreign judgments, but enforcement depends on satisfying reciprocity requirements and passing a review by Argentine courts for compliance with local public order. A judgment obtained in the United States, Brazil, or a European jurisdiction must undergo this process before it can be executed against Argentine assets.
Where the Argentine debtor has invoked force majeure or imprevisión as a defence in the foreign proceedings, the Argentine enforcement court may revisit those defences through the public order filter. This creates a risk of duplicated litigation. A creditor who believes it has resolved the dispute through a foreign judgment may find that Argentine courts are willing to re-examine core contractual questions when enforcement is sought domestically.
Governing law choices in cross-border contracts. Practitioners advising clients on contracts with Argentine counterparties frequently recommend the inclusion of explicit governing law clauses designating a neutral system. English law. New York law. Alternatively, Swiss law. combined with an arbitration clause. This combination does not eliminate the risk of Argentine law being invoked. However. It substantially limits the grounds on which local courts can intervene and relocates the primary dispute resolution mechanism to a forum less susceptible to Argentine macro-economic defences.
A common mistake made by international businesses entering the Argentine market is to accept a governing law clause designating Argentine law without appreciating its consequences. In a stable jurisdiction, governing law is largely a procedural choice. In Argentina, it is a substantive decision about which doctrinal defences – including imprevisión – will be available to the counterparty in a crisis. Reversing that choice after a dispute has arisen is not possible.
Brazil and Colombia: a regional comparison. Brazilian civil legislation contains a comparable hardship doctrine, and Colombian commercial legislation has developed a similar body of case law on economic imprevisión. However, the thresholds differ. Brazilian courts have historically set a higher bar for what constitutes an extraordinary change of circumstances, partly because Brazil's inflation and currency history, while significant, differs from Argentina's in scale and frequency. Colombian courts have been more willing to apply hardship doctrine in infrastructure and public contract disputes than in purely private commercial agreements.
For a business managing a portfolio of contracts across multiple Latin American jurisdictions. The practical implication is that a single macro-economic shock. a regional currency crisis, a commodity price collapse. will trigger different legal consequences in each country. A coordinated regional legal strategy, rather than country-by-country reactive responses, produces substantially better outcomes.
Our work on corporate dispute resolution in Argentina draws on experience across Iberian and Latin American markets, allowing clients to develop coordinated strategies that account for doctrinal differences across multiple civil law systems.
Self-assessment checklist and strategic outlook
When force majeure applies in Argentina – applicability conditions. A force majeure defence under Argentine civil and commercial legislation is applicable if all of the following conditions are met:
- The event is external to the debtor – not caused by the debtor's own conduct or economic decisions.
- The event was unforeseeable at the time the contract was signed – not a known or historically recurring risk in the relevant market.
- The event is irresistible – the debtor cannot overcome it by reasonable commercial means, including substitution of suppliers or adjustment of operations.
- There is a direct causal link between the event and the impossibility of performance – partial impossibility supports only partial discharge.
When imprevisión applies – conditions and limits. The hardship doctrine is available if:
- Performance is still physically possible but has become excessively burdensome.
- The change of circumstances is extraordinary – beyond the normal risk range for the relevant industry in Argentina.
- The change occurred after the contract was entered into and was not foreseeable at that time.
- The affected party has not contractually assumed the risk of the relevant change.
Before initiating proceedings – critical checklist. A party considering legal action in Argentina based on force majeure or imprevisión should verify the following before filing:
- Has notice been given to the counterparty? Argentine civil and commercial legislation requires the affected party to notify the other side promptly. Delayed notice weakens the claim and may be treated as a waiver.
- Has renegotiation been attempted or formally refused? Courts look more favourably on parties that made a genuine effort to reach an agreed solution before resorting to litigation.
- Is documentary evidence of the triggering event assembled and authenticated? Court filing in Argentine civil procedure requires supporting documents at the outset.
- Has the need for an interim injunction been assessed? Waiting for the first hearing to raise provisional measures is frequently too late under Argentine civil procedure rules.
Regulatory outlook. Argentine commercial legislation has been subject to ongoing reform discussions. The current civil and commercial code consolidated rules that previously existed in separate codes, but practitioners note that the force majeure and imprevisión provisions remain broadly worded. Judicial discretion is therefore unlikely to diminish in the near term. If anything, continued macro-economic volatility in Argentina means that disputes invoking both doctrines are likely to increase in volume. International businesses that have not yet reviewed their Argentine contract portfolios for force majeure and hardship exposure should treat that review as a priority rather than a routine maintenance task.
The trigger is not a future crisis. For many contracts already in force, the exposure exists today.
Frequently asked questions
Q: What is the difference between force majeure and hardship under Argentine contract law?
A: Force majeure in Argentina excuses a party entirely from performance when an external, unforeseeable, and irresistible event makes performance objectively impossible. Hardship – known as imprevisión – applies when performance remains possible but becomes excessively burdensome due to an extraordinary change in circumstances. Force majeure extinguishes the obligation; imprevisión opens the door to renegotiation or judicial adjustment of terms.
Q: How long does it take for an Argentine court to resolve a hardship dispute?
A: Timeline varies considerably by jurisdiction and court congestion. In the federal commercial courts of Buenos Aires, a fully litigated matter can take between two and four years from statement of claim to final judgment at first instance. Parties seeking interim relief through an interim injunction may obtain a provisional decision within days or weeks, but the underlying merits proceed on a separate, longer track. Engaging a lawyer in Argentina with civil procedure experience from the outset reduces procedural delays significantly.
Q: Can a foreign company invoke force majeure in an Argentine-law contract after a currency devaluation?
A: Currency devaluation alone is not recognised as force majeure under Argentine civil and commercial legislation, because it does not render performance impossible – it merely makes it more expensive. However, a severe and sudden devaluation may qualify as an extraordinary change of circumstances supporting an imprevisión claim. Courts assess the degree of disruption, the foreseeability of exchange-rate volatility in the Argentine market, and whether the affected party assumed that risk contractually. A law firm in Argentina with regional expertise can assess which doctrine – if either – applies to the specific facts.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in commercial disputes, force majeure analysis, and contract enforcement matters in Argentina and across Latin America. We work with international entrepreneurs, institutional investors, and in-house legal teams managing contract risk across Iberian and Americas markets. The firm's corporate disputes and commercial litigation practice covers jurisdictions across civil law systems in South America, supported by a network of local counsel in Buenos Aires and other key commercial centres. Our attorneys have advised on hardship and force majeure matters across both civil law and common law systems. Additionally. The firm participates in cross-border practice groups focused on contract law and dispute resolution in Latin America. For a tailored strategy on force majeure or hardship claims in Argentina, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.