Models Available to Parties to Regulate and Distribute Contractual Risk. Hardship Clauses in Particular.

22 Pages Posted: 19 Oct 2022

See all articles by Rui Ataíde

Rui Ataíde

Faculdade de Direito da Universidade de Lisboa - Lisbon Public Law

Date Written: October 19, 2022

Abstract

As a consequence of the binding character of contracts, performance must be rendered, despite the added burden it may impose on the debtor.
However, in order to guard against the possibility of a change of circumstances causing difficultas praestandi, the parties may stipulate hardship clauses, normally in long-term contracts. In the event of hardship, the disadvantaged party is entitled to seek renegotiation. If no agreement is reached in a reasonable period of time, either party may appeal to the courts. If the court finds that hardship exists, it may terminate the contract or adapt its content, in order to restore its equilibrium.
If a force majeure event occurs, the parties may also provide for substitute performance or a new contractual agreement.

Keywords: hardship clauses, force majeure clauses, good faith, renegotiation, review of contract

Suggested Citation

Ataíde, Rui, Models Available to Parties to Regulate and Distribute Contractual Risk. Hardship Clauses in Particular. (October 19, 2022). Centro de Investigação de Direito Privado (CIDP) Research Paper No. 22, Available at SSRN: https://ssrn.com/abstract=4252630 or http://dx.doi.org/10.2139/ssrn.4252630

Rui Ataíde (Contact Author)

Faculdade de Direito da Universidade de Lisboa - Lisbon Public Law ( email )

FDUL
Alameda da Universidade
Lisboa, 1649-014
Portugal

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