When circumstances change radically after a contract has been concluded, parties may try to seek relief from performance. If the terms of the contract itself do not assist, the underlying governing law may offer a remedy, depending on the supervening events in question and their effect on the contract. The authors examine the legal mechanisms that Swiss and English contract law provide to address such situations and compare how they each would approach some of the recent unprecedented global events that have affected international commerce.
Both systems are reticent to intervene except where the changes affecting the contract are extreme; therefore, parties will often prefer to try to allocate risk of supervening events by including appropriate contractual terms. In the absence of such terms, both Swiss and English law may relieve a party’s liability if performance has become impossible. English law goes further, also offering respite where the purpose of the contract has been frustrated, but will not intervene solely to protect a party from a bad economic outcome. In contrast, Swiss law does permit a judge or arbitrator to intervene and amend the parties’ contract in cases of extreme economic imbalance.Business Law Review