n Stellenbosch Law Review = Stellenbosch Regstydskrif - Gap filling to address changed circumstances in contract law - when it comes to losses and gains, sharing is the fair solution

Volume 21, Issue 3
  • ISSN : 1016-4359
  • E-ISSN: 1996-2193



The problem of changed circumstances arises when the factors on which contracting parties had based their consensus are fundamentally changed. This upsets the equilibrium of contractual exchange, since performance now becomes more onerous for one of the parties. The result will usually be a loss for one party and possibly even a windfall gain for the other. This issue of changed circumstances, or hardship, as it is often referred to, is dealt with by many leading Western legal systems. Countries such as Germany and the Netherlands deal with this problem in terms of their civil codes. English law has the doctrine of frustration, as does the US, although discharge is far more readily permitted in the latter jurisdiction. In the realm of international trade there are rules on hardship contained in the Unidroit Principles of International Commercial Contracts ("PICC"), as well as in the Principles of European Contract Law ("PECL") and the Draft Common Frame of Reference ("DCFR"). Comparative study thus reveals that this is a widely acknowledged problem and that leading legal systems address it with their own idiosyncratic rules.

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