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Brexit as an Exceptional Change of Circumstance?

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Abstract

Few issues in the law of obligations have yielded solutions so disparate as those offered for exceptional changes of circumstances after the formation of contracts. These differences are especially noticeable between civil law systems, despite their common origins and the mutual influences.

Although the solutions differ, the doctrine of change of circumstances is recognised today, with some variations, in most European legal systems: in Germany, in § 313 of the BGB; in the United Kingdom, the common law courts have developed the doctrine of frustration; in Italy, in Article 1467 of the Codice Civile; and in Portugal, in Article 437.° of the Código Civil. In a recent development, French law, traditionally averse to the construction, also established the doctrine in the great reform of 2016, in Article 1195 of the Code Civil.

In this chapter, we shall examine the possibility of considering Brexit as an exceptional change of circumstances, in the light of the following European legal systems: Germany, France, the United Kingdom, Italy and Portugal, and the consequences such a classification could have for the conservation or amendment of contracts currently in force.

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Notes

  1. 1.

    The construction was applied in the famous case RG 3-feb.-1922, RGZ 103 (1922), 328–344.

  2. 2.

    https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p1141.

  3. 3.

    CassFr 9-jan.-1856, D 1856, 1, 41–42.

  4. 4.

    CassFr 6-mar.-1876, D 1876, 1, 193–197.

  5. 5.

    Paradine v Jane (1646) Aleyn 26–28, 27.

  6. 6.

    (1863) 3 B. & S. 826–840.

  7. 7.

    At 826.

  8. 8.

    At 839.

  9. 9.

    Krell v Henry [1903] 2 K.B. 740–755.

  10. 10.

    Baily v De Crespignny (1869) L.R. 4 Q.B. 180–189.

  11. 11.

    Metropolitan Water Board v Dick, Kerr & Co Ltd [1918] A.C. 119–141.

  12. 12.

    [1956] A.C. 696–736.

  13. 13.

    [1981] A.C. 675–718.

  14. 14.

    At 700.

  15. 15.

    Italy: Articles 1428, 1429 and 1431 of the Codice Civile; Portugal: Articles 247.° and 251.° of the Código Civil.

  16. 16.

    In French law, mistake is grounds, as a rule, for nullity of the contract, and not mere annullability: Articles 1130–1132.

  17. 17.

    Bell v Lever [1932] AC 161–237, 206.

  18. 18.

    Twentieth Century Fox Film Corporation v British Telecommunications plc (No. 2) [2011] EWHC 2714 (Ch), [47].

  19. 19.

    B.P. Exploration Co (Libya) v Hunt (No. 2) [1981] 1 WLR 232–245, 241.

  20. 20.

    RG 27-may-1921, RGZ 102 (1921), 203–206.

  21. 21.

    STJ 20-may-2015, Proc. 1869/12.

  22. 22.

    STJ 26-01-2016, case 876/12.9TVLSB and STJ 10-10-2013, case 1387/11.5TBBCL. Taking a different position: STJ 29-jan.-2015, case 531/11.7TVLSB.

  23. 23.

    The issue was also debated in France, during the Franco-Prussian War of 1870–71 (Cordeiro 2016: 473–474). United Kingdom: Denny, Mott and Dickson Ltd v James B Fraser & Co Ltd [1944] AC 265–285.

  24. 24.

    We may also recall the runaway inflation experienced by the Weimar Republic, and the application by the German courts of the doctrine of the basis of contract (Geschäftsgrundlage).

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Authors and Affiliations

  1. Lisbon University School of Law, Lisbon, Portugal

    A. B. Menezes Cordeiro

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  1. A. B. Menezes Cordeiro
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Editors and Affiliations

  1. CIDEEFF - School of Law, Univ of Lisbon, University of Lisbon, Lisbon, Portugal

    Nazaré da Costa Cabral

  2. CIDEEFF, University of Lisbon School of Law - Faculdade de Direito da Universidade de Lisboa, Alameda da Universidade - Cidade Universitária, Lisbon, Portugal

    José Renato Gonçalves

  3. CIDEEFF, University of Lisbon School of Law - Faculdade de Direito da Universidade de Lisboa, Alameda da Universidade - Cidade Universitária, Lisbon, Portugal

    Nuno Cunha Rodrigues

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Menezes Cordeiro, A.B. (2017). Brexit as an Exceptional Change of Circumstance?. In: da Costa Cabral, N., Renato Gonçalves, J., Cunha Rodrigues, N. (eds) After Brexit. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-66670-9_8

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  • DOI: https://doi.org/10.1007/978-3-319-66670-9_8

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