Change of Circumstances and Judicial Power: A European Perspective of Contract Law

Abstract

An obligation should always be performed, even when its performance has become more onerous. However, if the performance of a contractual obligation has become extremely onerous because of an exceptional change of circumstances, the answer must be different. This paper discusses how the judicial power deals with changes of circumstances in long-term contracts. There are two traditional schools of thought and, consequently, two fundamental doctrinal views of court intervention in case of hardship: the first one simply envisages the termination of the contract; the second one establishes instead a duty to renegotiate the original contract. The European “soft law” approach drafts a sort of third way: the court may either (1) adapt the contract in order to make it reasonable and equitable or (2) definitively terminate the original contract (“Principles of European Contract Law”, 2002, and “Draft Common Frame of Reference”, 2009). On the one hand, the choice between variation and termination of contract is surely a fascinating perspective to protect the position of the debtor (and, eventually, to preserve the contract). On the other hand, the absence of specific adjustment criteria could represent a problem for the legal certainty of commercial transactions. In this context, scholars should offer interpretations capable of specifying the European “soft law” criteria based on general clauses (such as “good faith”/“equity”) and inspiring the legislative introduction of specific adjustment criteria. A legal system must ensure, in case of hardship, not only the equity of contract, but also the legal certainty of commercial transactions.



Author Information
Emanuele Tuccari, Catholic University of the Sacred Heart, Italy

Paper Information
Conference: ECPEL2015
Stream: Civil Law and the Court

This paper is part of the ECPEL2015 Conference Proceedings (View)
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