Analysis On The Principle Of Circumstance Change

At present, the law has not clear stipulation on the principle of Circumstance Change in China. But with the development of social economy, change of state economic policy and influence by international political and economic change on China's economy and living after its entrance to WTO, lots of problems and legal precedent of circumstance change appear in social life and judicial practice in China. For example, the fist case on SARS Contract in China. Applying the principle of Circumstance Change to solve contract dispute caused by situation change has become a legislative trend of modern theory on civil and commercial law in the world. The principle of Circumstance Change refers to the legal system that after the contract is taking effected and before the expiration date of performance, unexpected external circumstance instead of faults cased by both parties changes, and the contract is unable to performed or if performed, it is obvious unfair, therefore the parties is allowed to ask the court or arbitration organization to change or canceled the contract and the parties are exempted from liabilities for breach of contract. The principle of Circumstance Change is in an item of contract law basic principle which expands based on the Good faith principle. Below the suitable principle of Circumstance Change must satisfy the condition: the circumstance change objective existence, the circumstance change occurs in the contract becomes effective after the establishment fulfills before the expiration, the circumstance change cannot turn over to the responsibility to the bilateral litigants, the circumstance change to have cannot the foresight, because the circumstance change cause to fulfill the contract demonstration to be fair. The principle of Circumstance Change distinguishes between the Force majeure, the Significant misunderstanding, Reveals loses fairly, Commercial risk, Disclosure, adopts the litigant principle in the judicial practice, has legal effect which the change contract or terminates a contract.