Europe

Article 6.111 (ex art. 2.117) - Change of Circumstances 344 see also Mandatory Obligations Remedies

1. A party is bound to fulfil its obligations even if performance has become more onerous, whether because the cost of performance has increased or because the value of the performance it receives has diminished. 345

2. If, however, performance of the contract becomes excessively onerous because of a change of circumstances, the parties are bound to enter into negotiations with a view to adapting the contract or terminating it, provided that: 346

  • the change of circumstances occurred after the time of conclusion of the contract, 347
  • the possibility of a change of circumstances was not one which could reasonably have been taken into account at the time of conclusion of the contract, and 348
  • the risk of the change of circumstances is not one which, according to the contract, the party affected should be required to bear. 349

3. If the parties fail to reach agreement within a reasonable period, the court may: 350

  • terminate the contract at a date and on terms to be determined by the court; or 351
  • adapt the contract in order to distribute between the parties in a just and equitable manner the losses and gains resulting from the change of circumstances. 352 In either case, the court may award damages for the loss suffered through a party refusing to negotiate or breaking off negotiations contrary to good faith and fair dealing. 353

Article 8.108 (ex art 3.108) - Excuse Due to an Impediment 436 see also Mandatory Obligations Remedies

1. A party's non-performance is excused if it proves that it is due to an impediment beyond its control and that it could not reasonably have been expected to take the impediment into account at the time of the conclusion of the contract, or to have avoided or overcome the impediment or its consequences. 437

2. Where the impediment is only temporary the excuse provided by this article has effect for the period during which the impediment exists. However, if the delay amounts to a fundamental non-performance, the obligee may treat it as such. 438

3. The non-performing party must ensure that notice of the impediment and of its effect on its ability to perform is received by the other party within a reasonable time after the non-performing party knew or ought to have known of these circumstances. The other party is entitled to damages for any loss resulting from the non-receipt of such notice. 439

Section 3 - Termination Of The Contract 463

Article 9.303 (ex art. 4.303) - Notice of Termination 469

4. If a party is excused under Article 8.108 through an impediment which is total and permanent, the contract is terminated automatically and without notice at the time the impediment arises. 474

[see Termination - Breach above for ss (1) - (3)]