“Rebus sic stantibus” clause – the possibility of terminating the contract by the Court

Art. 357 CC and the “rebus sic stantibus” clause

Art. 3571 of the Civil Code (CC) states that:

“…If, due to an extraordinary change in relations, the performance of the benefit would be associated with excessive difficulties or would threaten one of the parties with a significant loss, which the parties did not foresee when concluding the contract, the court may, after considering the interests of the parties, in accordance with the principles of social coexistence, determine the method of fulfilling the obligation. , the amount of the benefit or even decide to terminate the contract. When terminating the contract, the court may, if necessary, decide on the parties’ settlements, guided by the principles set out in the preceding sentence.

To benefit from the clause, there must be an agreement between the parties. The court can only modify obligations arising from the contract, not the provisions of the Act or unilateral legal acts. The extraordinary change in relations must be characteristic and unforeseen at the time the contract was concluded. Situations such as natural disasters, economic crises or epidemics may be considered extraordinary changes.

When can the “rebus sic stantibus” clause be used?

It is important that the threat of substantial loss or undue hardship is associated with the extraordinary change. It is not necessary to prove impossibility of performance, but only a threat of serious loss or hardship. The cause-and-effect relationship between the change and the threat is also an important element. If the clause is used, the contract may be amended in the part in which it has not yet been performed, and in extreme cases it may be terminated.

Court’s powers under the “rebus sic stantibus” clause

If the above conditions are met, the Court has the power to:

• indication of the manner of performance of the obligation (in particular setting a new date or place of performance);
• changes in the amount of each party’s benefit;
• termination of the contract. It is worth bearing in mind that before we decide to start a court process to change the conditions or the amount of the benefit, as well as to terminate an already concluded contract, it is recommended to analyze the content of the contract in advance to determine whether the contract itself provides for the possibility of making these changes. Moreover, the mentioned legal institution can be effectively used as an argument strengthening the position and effectiveness of the demands made during contract negotiations.

How can BTLA help in cases of extraordinary change?

In the event of difficulties related to extraordinary changes that make it impossible to perform the contract, the use of the “Rebus sic stantibus” clause in accordance with Art. 357 § 1 of the Civil Code may be beneficial. The BTLA law firm offers assistance in the area of civil law, including handling matters related to obligations.