On The Application Of Principle Of Change Of Circumstances

The principle of the changed circumstances originated from the “the same termsand conditions” written in the famous book "optimal emperor ladder annotation law".After several ups and downs, the principle of the changed circumstances has finallywon a place in the legal system in many countries. For a long time, although thetheoretical circle of law in our country has been calling for incorporating the principleof the changed circumstances into clear legislation in our country, but for variousreasons, the law of our country does not specify the principle of the changedcircumstances, which causes that many special problems in the practice cannot besolved properly. Until2009, in order to meet the needs of the objective economicsituation, the supreme people’s court established the principle of changedcircumstances in judicial interpretation way. But due to the abstraction of the principleof changed circumstances, it is difficult to be accurately applied in the judicialpractice, which thus causes bigger operation difficulty. In order to correctly apply theprinciple of changed circumstances, we need to deeply analyze it. This thesis isdivided into four chapters:The first chapter is about the basic theory of the principle of circumstances. Thischapter firstly introduces the theoretical basis of the principle of the changedcircumstances, and then stresses on the development of the theory of basis of bargain in German judicial practice and its final establishment in legislation. It finally tells thestory of the legislation evolution of the principle of the changed circumstances in ourcountry.The second chapter focuses on the scope of application of the principle of thechanged circumstances. This chapter firstly defines circumstances and expatiates thenecessity of defining. Then it analyzes the essence of the principle of the changedcircumstances, and points out that its essence is the risk distribution. And the scope ofthe risk is defined. Then, through the investigation of the vast majority of cases, itanalyzes the types of changed circumstances: the destruction of the equivalencerelation and frustration of purpose. At the same time it points out difference offrustration of purpose and impossibility of performance.The third chapter is about the difference between the principle of changedcircumstances and two related concepts. This chapter firstly points out that definitionsof the changed circumstances and force majeure are similar and it difficult toaccurately distinguish them. Then it points out that it is unnecessary to do so throughthe analysis of several cases. Then it expounds the difference between the changedcircumstances and business risks, and analyzes the most common one: price change.The fourth chapter is about the legal effect of application of the principle ofchanged circumstances. From two aspects of entity and procedure, it expounds theprinciple of changed circumstances of legal effect. In terms of entity, the focus is onthe analysis of obligations of the parties to negotiate again; In terms of procedure, itanalyzes the restriction of the judge discretion.