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4 - Overview: concepts dealing with unexpected circumstances

Published online by Cambridge University Press:  04 April 2011

By
Ewoud Hondius  and
Hans Christoph Grigoleit
Edited by
Ewoud Hondius  and
Christoph Grigoleit
Ewoud Hondius
Affiliation:
University of Utrecht, the Netherlands
Hans Christoph Grigoleit
Affiliation:
University of Munich, Germany
Ewoud Hondius
Affiliation:
Universiteit Utrecht, The Netherlands
Christoph Grigoleit
Affiliation:
Ludwig-Maximilians-Universität Munchen
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Summary

GERMANY AND RELATED JURISDICTIONS

Germany

Introduction

Under German law the most prominent, general and important concept dealing with the effects of unexpected circumstances on the contract is the doctrine of Störung der Geschäftsgrundlage. This principle can roughly be described as an equitable relief that allows the courts to adapt or terminate a contract if the factual framework diverges fundamentally from the parties' expectations. The doctrine of Störung der Geschäftsgrundlage has been developed as a mechanism to define the limits of acceptable risk distribution by contractual stipulations. There are several other rules of a statutory or contractual nature dealing more specifically with the allocation of unexpected risks involved in a deal. It is widely accepted that the concept of Störung der Geschäftsgrundlage has a subsidiary character, i.e., it does not apply if the risk in question is provided for by either contractual or statutory provisions. The scope of the concept of Störung der Geschäftsgrundlage therefore depends on the application of those other legal rules.

Legal doctrines bordering the concept of Störung der Geschäftsgrundlage

The rules of mistake (§§119 et seq. BGB)

Three characteristics of the German law of mistake have a decisive influence on the scope of application of the doctrine of Störung der Geschäftsgrundlage. First, only certain kinds of errors are relevant, second, the consequence of a relevant mistake is only the avoidance of the contract, and, third, the party avoiding the contract may be liable for damages even if the mistake is mutual.

Type
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Unexpected Circumstances in European Contract Law , pp. 55 - 172
Publisher: Cambridge University Press
Print publication year: 2011

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