A moratorium is a word that can often be heard from TV screens. Often he is associated with the topic of arms limitation. But this term has other interpretations that relate to the legal and economic fields. Details on the meaning of “moratorium” can be found in the article.
Dictionary wording
There, the meaning of the word “moratorium” is stated as follows.
- This is an economic term for deferred payment of existing debt obligations. Deferral is granted for any period or until the onset of certain circumstances.
- In economics, a moratorium is the termination of debt payments, which is not specified in time.
- Also in the economy, this is a statement by the borrower, documented, that he is not able to pay the debt or part of it.
- In jurisprudence, this is an agreement between states that involves deferring or abstaining from any action for a period that may be indicated or for an indefinite period.
Further, what a “moratorium” means will be described in more detail.
In economics
Moratorium is a Latin word for slow, delaying. This is a right granted to defer payment of debts. It is provided either by administrative or judicial procedure. It must be distinguished from the postponement specified in the contract between counterparties. Distinguish between special and general moratoriums.
The first is provided regarding a specific legal relationship. And the second, which is also called general, is introduced during the period of disasters that have befallen the country: during the war, epidemic, crisis. Then the laws on obligations are suspended, and a deferral of debts is granted to all residents of the country.
The custom to grant a moratorium to debtors appeared in Rome, under Emperor Constantius I. He, like his successors, delayed the performance of obligations to persons who were close to the court. Under Grazian, Valentinian II and Theodosius, tradition was already formed, and they turned it into a system. Under Justinian, it was found that to satisfy a request for a deferral, the consent of most creditors was necessary. Upon receipt, the minority is bound by such a decision. Moreover, the delay cannot be more than five years.
In Western Europe, a moratorium appeared in the XIV century under the influence of Roman law. He looked like a privilege, given in abundance to the bankrupt nobles. In the Middle Ages a broader concept appeared - “indult”. At first it denoted a deferment, and later any privilege. Over time, the moratorium became a legal institution, enshrined at the legislative level as one of the conditions for bankruptcy.
In international law
In this area, a moratorium is a delay, which is given in the performance of obligations under contracts. And also means abstinence from certain actions before circumstances arise or end, affecting this relationship. This may be agreed upon by subjects of international law with an interest in the matter.
In most situations, such an agreement is subject to the principle of reciprocity. However, there are many examples in the history of diplomatic relations when a moratorium was declared unilaterally. So, it was declared twice by the Soviet Union in 1985. This refers to the deployment of its own medium-range military missiles, as well as to any kind of nuclear test.
In civil law
Here, a moratorium is a delay in the performance of an obligation caused by circumstances that are not controlled by the parties to the transaction or other legal relations. The latter are equated: war, state of emergency, natural disaster. The definition of a moratorium implies a close relationship with the concept of liability following failure to fulfill obligations.
The party to the contract that suffers from a violation of its rights has the opportunity to seek their protection for a certain period of time, by which they mean the limitation period. There are situations when it is either prolonged or its course is suspended. In Art. 202 of the Civil Code of the Russian Federation is an indication of a delay in the fulfillment of obligations established by the government of the Russian Federation. In the UK there is a law that provides for the possibility of deferment in the satisfaction of creditors if the party to the obligation is held captive.