The duty to renegotiate the contract as a result of changed circumstances

Abstract

This article addresses the importance of the existence of a duty to renegotiate in the event of changed circumstances is transversal to all western legal systems as the first manifestation of Alternative Dispute Resolution Methods (ADR). As regards the legal effects of a change in circumstances. In the absence of an explicit legal or contractual stipulation, the parties are obliged to renegotiate the original terms of the contract in order to adapt it to new circumstances. This obligation is imposed on both the favoured and the affected parties by the occurrence of a change in circumstances, with the contracting parties being required to conduct themselves according to the principle of good faith during renegotiation. However, because of the nature of this duty, the parties are not obliged to reach an agreement that would mean adapting the contract to new circumstances. The dynamic conception of good faith allows the creation of an obligation to renegotiate on the part of the contractors. While it is generally accepted that the duty of good faith in the performance of the contract is the basis for renegotiation, it is more difficult to determine the content and nature of this duty.