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Legal Terms - change of circumstances (in contract law)
The circumstance when, following the conclusion of the contract, one of the contracting parties' positions is materially changed. If the circumstances reach the point of *frustration in such a scenario, or if the contract has a *force majeure clause covering the particular event, the contract may be discharged. If not, even if doing so is far more difficult or no longer beneficial for one of the parties, the contract should be carried out as agreed. Financial difficulties do not justify poor performance. Under English contract law, the parties are not required to renegotiate in the event that their circumstances change. This is not the situation in certain other jurisdictions; for example, the UNIDROIT Principles of International Commercial Contracts stipulate that the parties shall renegotiate in the event of economic hardship. Nonetheless, while interpreting contractual provisions to ensure that they accurately reflect the parties' intentions, courts have the authority to consider notable developments in the law or the economy. According to With v. O'Flanagan [1936] Ch 575 (CA), if circumstances change after a *representation was made but before the parties finalize the contract, the representor should notify the representee of the change.
The circumstance when, following the conclusion of the contract, one of the contracting parties' positions is materially changed. If the circumstances reach the point of *frustration in such a scenario, or if the contract has a *force majeure clause covering the particular event, the contract may be discharged. If not, even if doing so is far more difficult or no longer beneficial for one of the parties, the contract should be carried out as agreed. Financial difficulties do not justify poor performance. Under English contract law, the parties are not required to renegotiate in the event that their circumstances change. This is not the situation in certain other jurisdictions; for example, the UNIDROIT Principles of International Commercial Contracts stipulate that the parties shall renegotiate in the event of economic hardship. Nonetheless, while interpreting contractual provisions to ensure that they accurately reflect the parties' intentions, courts have the authority to consider notable developments in the law or the economy. According to With v. O'Flanagan [1936] Ch 575 (CA), if circumstances change after a *representation was made but before the parties finalize the contract, the representor should notify the representee of the change.
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