Global Guide: Hardship

The binding force of contracts is a basic principle of contract law (“pacta sunt servanda”). In general, each party can rely on the performance of the contractual obligations by the other party. Yet, unexpected circumstances may occur after the conclusion of a contract which call this principle into question.

Our comparative review considers how such hardship situations are being dealt with in 18 jurisdictions. All of them have mechanisms in place to handle such situations, but allow interference with the binding nature of a contract only under restrictive conditions.