Solution

Lack of access to foreign currency or the need to obtain approval for payment from a regulatory authority, does not negate the entity's contractual obligation or the holder's contractual right under the instrument.

The lack of access to foreign currency or the need to obtain approval for payment from a regulatory authority can create restrictions on an entity's ability to satisfy a contractual obligation. These restrictions may impact the ability of the entity to make timely payments or comply with other terms and conditions of the contract.

For example, if an entity has a contractual obligation to make a payment in a foreign currency and is unable to obtain that currency due to restrictions on foreign currency transactions in its country, it may not be able to fulfill its obligation on time. Similarly, if an entity is required to obtain approval from a regulatory authority before making a payment, the delay in obtaining such approval may result in a breach of the contract.

However, the existence of such restrictions does not automatically create a contractual obligation. The contractual obligation would already exist prior to the imposition of any restrictions. The restrictions would only impact the entity's ability to fulfill the obligation.

It is important for entities to consider the potential impact of such restrictions when entering into contracts, and to include appropriate provisions in the contract to address such situations. For example, the contract could specify alternative methods of payment or provide for an extension of time in case of delays due to regulatory approvals.

In summary, while the lack of access to foreign currency or the need to obtain approval for payment from a regulatory authority may impact an entity's ability to fulfill a contractual obligation, it does not in itself create a contractual obligation.