Abstract
In many legal systems a fundamental change to the circumstances of a contract can serve to loosen the binding nature of that contract. The legal doctrine that provides this effect is called by various names in the different European countries. In previous European instruments, such as the PECL and the DCFR, the term used has been “change of circumstances”, and this is also the term settled on for the CESL, specifically in Article 89 CESL. When the exact fulfillment of a contract becomes disproportionate due to an unexpected change of circumstances, Article 89 contains a duty to renegotiate. If, within a reasonable period of time, the parties do not reach an agreement, they may request the assistance of the court or arbitrator. The judge may decide to adapt the contract taking into account the hypothetical will of the parties, or declare the dissolution of the contract and lay down the conditions for so doing.
The application of Article 89 CESL should not be problematic in the different European countries as there are a lot of similarities between the various European legal systems in this field, both in the terms used and the results achieved, as well as in its treatment by legal scholars.
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Notes
- 1.
Amendment 177 of the European Parliament legislative resolution of 26 February 2014 on the proposal for a regulation of the European Parliament and of the Council on a Common European Sales Law (COM(2011)0635-C7-0329/2011-2011/0284(COD)) has changed Article 89—paragraph 3—point c in this sense: “(c) the aggrieved party, relying on the change of circumstances, did not assume, and cannot reasonably be regarded as having assumed, the risk of that change of circumstances”.
- 2.
Judgment of the Supreme Court 25 June 1999, NJ 1999, 602.
- 3.
Judgment Supreme Court 18 January 2002, NJ 2002, 106.
- 4.
Judgment Supreme Court 20 February 1998, NJ 1998, 493.
- 5.
[1903] 2 KB 740
- 6.
[1943] AC 32. The allocation of loss is now covered by the Law Reform (Frustrated Contracts) Act 1943—see below.
- 7.
[1979] B.L.R. 81.
- 8.
[1990] 1 Lloyds Rep. 1
- 9.
Judgment of the Supreme Court 14 December 1940 (RJ 1940, 1135) involving a contract for the sale of a mine; Judgment of the Supreme Court 26 March 1963 (RJ 1963, 2120) on the use of water by a community; Judgment of the Supreme Court 31 November 1963 (RJ 1963, 4264).
- 10.
Judgment of the Supreme Court 5 June 1945; Judgment of the Supreme Court 6 October 1987 (RJ 1987, 6720); Judgment of the Supreme Court 29 May 1996 (RJ 1996, 3862); Judgment of the Supreme Court 27 April 2012 (RJ 2012, 4714).
- 11.
Judgment of the Supreme Court 19 April 1985 (RJ 1985, 1804); Judgment of the Supreme Court 19 November 1994 (RJ 1994, 8539); Judgment of the Supreme Court 15 November 2000 (RJ 2000, 9214).
- 12.
In the Judgment of the Supreme Court 23 November 1962 (RJ 1962, 5005) the effects of the clause is to modify the contract. However, the Judgments of the Supreme Court 28 January 1970 and 23 March 1988 (RJ 1988, 2228) declared that it terminated the contract. In the Judgments of the Supreme Court 9 July 1984 (RJ 1984, 3803), 6 November 1992 (RJ 1992, 9226) and 21 July 2010 (RJ 2010, 3897) the effect was the modification of the contract.
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Martínez Velencoso, L. (2015). Change of Circumstances. In: Plaza Penadés, J., Martínez Velencoso, L. (eds) European Perspectives on the Common European Sales Law. Studies in European Economic Law and Regulation, vol 4. Springer, Cham. https://doi.org/10.1007/978-3-319-10497-3_8
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