Enabling Private Ordering - the University of Minnesota Law School

74 MINNESOTA JOURNAL OF INT’L LAW [Vol. 18:1
the doctrine of change of circumstances has been read into
contracts between States and foreign nationals. 206 This
widespread acceptance of the doctrine in domestic and
international law therefore suggests that it constitutes a
general principle of law. 207
What is common to all these doctrines is that they
constitute ways of dealing with contingencies that arise in longterm
relational contracts. The elements common to all
expressions of the clausula in its various shades that justify an
adaptation of the contractual relationship are:
1. the change of circumstances that were either
explicitly stipulated or presupposed by the parties
after the conclusion of the contract;
2. the risk of the change of circumstances is outside the
sphere of risk of both parties according to the risk
allocation of the contract;
3. the change of circumstances was not foreseeable;
and
4. the change affected the contractual equilibrium
significantly so that one has to assume that the
parties would not have concluded the contract the
way it has been concluded.
In sum, it is widely accepted both in domestic as well as in
international law that the principle of pacta sunt servanda is
not strictly adhered to but limited with respect to influence of
future contingencies on the contractual bond. This widespread
acceptance should thus also be mirrored in the interpretation
signature May 23, 1969, 1155 U.N.T.S. 331, accepts the doctrine of change of
circumstances for international treaties; see IAN BROWNLIE PRINCIPLES OF PUBLIC
INTERNATIONAL LAW (4th ed. 1990) 619–21; Detlev F. Vagts, Rebus Revisited:
Changed Circumstances in Treaty Law, 43 COLUM. J. TRANSNAT’L L. 459 (2005).
205. See ULRICH AMMANN, DER SCHUTZ AUSLÄNDISCHER PRIVATINVESTITIONEN
IN ENTWICKLUNGSLÄNDERN AUS VÖLKERRECHTLICHER, VOLKSWIRTSCHAFTLICHER
UND BETRIEBSWIRTSCHAFTLICHER SICHT 110–13. (1967); HELMUT FRICK,
BILATERALER INVESTITIONSSCHUTZ IN ENTWICKLUNGSLÄNDERN 52 (1975). See also
LIAMCO v. Libya, 20 I.L.M. 1, 57 (1981) (“[T]he binding force is subject to the
continuance of circumstances under which a treaty was concluded. If such
circumstances change substantially, then its modification or cancellation may be
claimed or resorted to.”).
206. RALF KÖBLER, DIE “CLAUSULA REBUS SIC STANTIBUS” ALS ALLGEMEINER
RECHTSGRUNDSATZ (1991); BIN CHENG, GENERAL PRINCIPLES OF LAW 113, 118–19
(1953) (stressing that a change in circumstances must have been not reasonably
contemplated at the time of the conclusion of an international treaty); Norbert Horn,
Changes in Circumstances and the Revision of Contracts in Some European Laws
and in International Law, in ADAPTATION AND RENEGOTIATION OF CONTRACTS IN
INTERNATIONAL TRADE AND FINANCE 15, 25 (Norbert Horn ed., 1985).