International Construction Law Review
FORCE MAJEURE AND UNFORESEEN GROUND CONDITIONS IN THE NEW MILLENNIUM: UNIFYING PRINCIPLES AND “TALES OF IRON WARS”*
PHILIP LANE BRUNER
Head of Construction Law Group and partner, Faegre & Benson LLP, Minneapolis, Denver, Des Moines, London, and Frankfurt
“In thy faint slumbers I by thee have watch’d And heard thee murmur tales of iron wars…”.
Shakespeare, Henry IV, Part I,
Act II, Scene 3
INTRODUCTION: THE ETERNAL DILEMMA
Enforcement of contractual obligation or excuse of non-performance caused by unforeseen conditions is a legal dilemma as old as humanity and as eternal as life itself. Since time immemorial, this issue has led lawmakers and judges to ponder whether and under what circumstances contractual non-performance caused by unforeseen existing conditions or fortuitous supervening events may be excused. For more than two thousand years, judges under national legal systems rooted in Roman law have walked the narrow path between the Roman doctrines of pacta sunt servanda
(“contracts must be honoured”) and rebus sic stantibus
1
(“provided the circumstances remain unchanged”).2
This path has been ever-shifting, forever being
* Portions of this article will appear in Bruner and O’Connor, Treatise on Construction Law,
West Publishing Company. This article is a revised version of a paper presented by Mr Bruner to the International Bar Association’s Committee on International Construction Projects on 29 September 1999, in Barcelona, Spain.
1 Under Roman law, this principle of “changed circumstances” was implied in contracts. It is said that: “[T]he words ‘rebus sic stantibus’
are just the core of a maxim, the full text of which is, Contractus qui habent tractum succesivum et dependentiam de futurum, rebus sic stantibus intelligentur
—which may be freely translated as, ‘Contracts providing for successive acts of performance over a future period of time must be understood as subject to the condition that the circumstances will remain the same.’” See Saul Litvinoff, “Force Majeure, Failure of Cause and Theorie de L’imprevision: Louisiana Law and Beyond”, (1985) 46 La L Rev 1, 4; see also Michael G Rapsomanikis, “Frustration of Contract in International Trade Law and Comparative Law”, (1980) 18 Duquesne L Rev 551, 552, citing R Lee, The Elements of Roman Law
4th edn (1956) 349–350.
2 As explained by Professor GH Treitel in the introduction to his comprehensive book entitled Frustration and Force Majeure
(1994) Sweet & Maxwell:
“[T]he principle of sanctity of contract, sometimes expressed in the Latin maxim pacta sunt servanda
…insists on the literal performance of contracts in spite of the fact that events occurring after the con tract was made have interfered with performance of one party, or reduced its value to the others; it is based on the view that one of the principal purposes of contract as a legal and commercial institution is precisely to allocate the risks of such events. It takes the position that these risks, having been so allocated by the parties, should, as a general rule, not be re-allocated in a different manner by the courts. On the other hand, the principle of sanctity of contract, like many legal principles, is not considered to express an absolute value. It is qualified by a counter-principle that parties who enter into contracts often do so on the basis of certain shared, but unexpressed assumptions. This counter-principle is also sometimes expressed in a Latin phrase, rebus sic stantibus.
Its effect is in certain cases to discharge contractual obligations because circumstances have changed since the conclusion of the contract so as to destroy a basic assumption which the parties had made when they entered into the contract.”
[2000
The International Construction Law Review
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