Circumstances affecting the fulfillment of contractual obligations

Practice shows that the Russian courts consider the customer’s budget financing reduction, the epidemiological situation (the introduction of restrictive measures or self-isolation regime), a sharp change in the foreign policy situation in the country, which directly concerns the execution of the contract, and so on, to be significant circumstances.

On the other hand, neither inflationary processes nor the financial crisis are recognized as significant changes, as well as changes in the exchange rate, deterioration of the financial condition of the party to the contract, bankruptcy of the bank, violations by the counterparty and much more. According to the judges, such circumstances have already occurred more than once in history, that is, they are predictable, and when concluding an agreement, the parties had to take these risks into account.

As for the construction sector, the contractor has the right to demand a revision of the terms of the contract or its termination if, for reasons beyond his control, the cost of the work exceeded the estimate by at least 10 percent. At the same time, if the customer refuses to increase the price, the contractor does not have the right to suspend work – he either fulfills the contract on the original terms, or goes to court.

Source: API Press
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