The Application Of The System Of The Change Of Circumstances

Signing a contract means that the contracting parties reach an agreement and the rights and obligations between them are stable.Once the circumstances has significantly changed,the basic of the contract will be influenced,resulting in unbalanced interests.On this occasion,the principle of the change of circumstances is extremely useful.It can balance interests,reduce conflict and regularize behavior.On May 13,2009,the interpretation(2)of contract law was officially practiced and it stipulated the principle of the change of circumstances for the fist time.This judicial interpretation fills the vacancy on law,providing legal basis for the justice practice of the principle of the change of circumstances.Today,with changeable economic situation,the change of circumstances may become a frequent occurrence and influence the performance of contracts.This judicial interpretation can effectively deal with this situation,re-balancing the interests of the contracting parties.Meanwhile,it gives the judge more discretion.They can make a judgment according to specific situation in order to protect people's legitimate rights and interests and combine law effect with sociable effect.However,it is controversial that if the principle of the change of circumstances should be Included in the legislation.It's difficult to differentiate among the change of circumstances,commercial risk and force majeure.There is no absolute standard to identify the change of circumstances.Such problems have direct relation to the effect of the principle of the change of circumstances injustice practice in China.This paper first introduces some foreign theories about the principle of the change of circumstances.Next,according to the attitude of legislature and judicature,the paper analyzes the current situation of the principle of the change of circumstances in China.Meanwhile,it uses some cases to explain the problem.Then it analyzes the judicial interpretation of the principle of the change of circumstances in interpretation(2)of contract law.In this interpretation,the stipulation about the principle is unclear.We need a clear standard to accurately apply the principle.Therefore,the paper next analyzes the application conditions and legal consequence of the principle of the change of circumstances in detail.Then it compares the change of circumstances with other related concepts and discusses the problem of application procedure.At last,the author gives some legislative suggestions about the principle of the change of circumstances.