Research On The Application Of The Rrinciple Of Change Of Circumstances In China

The principle of change of circumstances is an important principle of modern contract law to achieve fairness and justice,which helps eliminate the unfair consequences of contract due to change of circumstances.In the context of the worldwide outbreak of COVID-19,which has impacted on the performance of many contracts,the principle of change of circumstances has received increased attention.The principle of change of circumstances is already a major principle that is required in most national legal systems.However,it was circumvented in China when the Contract Law of the People’s Republic of China was enacted in 1999.The normative basis of the principle of change of circumstances was first established in 2009,which was further improved by Article 533 of the Civil Code of the People’s Republic of China.From the perspective of judicial practice,the change of circumstances clause has played an important functional role.However,the nature and legal effect of the duty to renegotiate and the rules applicable in the case where force majeure and change of circumstances overlap each other are still unclear.Besides,the discretion of judges in the application of the principle of change of circumstances can be excessive.An in-depth study is thus necessary.The duty to renegotiate should be regarded as a collateral obligation and the first legal effect of the change of circumstances.The parties should be entitled to suspend performance during the period of renegotiation,while the breach of the duty to renegotiate should be liable for damages.In the case of partial failure to perform the contract and the parties hold different claims,the rule of force majeure should be applied in preference.And when the indirect purpose of the contract cannot be achieved,the principle of change of circumstances should be applied.With regard to the discretionary power of judges,emphasis should be placed on the party doctrine in the application of the principle of change of circumstances,and on the basis of introducing the duty to renegotiate,the discretionary power of judges should be recognized to a limited extent,and the judicial decision should be made based on the modification proposal proposed by the parties through negotiation.If it fails to form a reasonable modification proposal,a judicial decision should be made to terminate the contract,so as to force the parties to seek a reasonable modification proposal.It is not advisable for judges to insist on making adjustments to the contract.