Examine The Situation To Change The System Applicable In The Construction Contract

The System of Changed Circumstances means that a binding contract, which is legally formed, may be modified or discharged by the parties under the doctrine of honesty and creditability, for the unforeseen circumstances not arising from any party's fault which make the perfonnance of the contract impossible or the performance of it clearly unfair. There has been a theoretical consensus of its origin, growth and elements. It is greatly disputed whether we should make it a piece of legislation. As a matter of fact, it was compiled into the draft of the contract law many times but cancelled out of the final edition. In 2003, it was compiled into the draft of Civil Law Code once more.In construction contracts, there have been clear and exact choices for the pricing. Different ways mean different risk-allocation and risk-affording. The changed circumstances are in the realm of contract's risk. It can be concluded that the appliance of the System of Changed Circumstances is greatly limited in construction contracts through inspecting the connotation and risk-allocation of the pricing ways, such as cost and rewards, adjustable price, fixed unit price and fixed total price.Force Majeure and the Changed Circumstances are two closely related conceptions. The opinion has been presented that the issue of the Changed Circumstances would be dealt with by enlarging the scope of Force Majeure. The character of construction projects has decided that in construction contracts there has been mature and perfect regulation about Force Majeure. We can confirm that the scope of Force Majeure clause in construction contracts has included the content of the Changed Circumstances through analyzing the standard construction contracts both in China and overseas, especially the Conditions for Contract of FIDIC 1999.Commercial risk and the Changed Circumstances may be differed theoretically. In factual operation, however, it is difficult to differ them because the risk in construction contracts is complicated and systematic. Among all the risks, the sharp rise of the price of building materials and the change of constructing conditions are two common, typical risks with relatively realistic significance. It is necessary to explore both of the two risks and the...