Marija Karanikić Mirić

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Faculty of Law, University of Belgrade

PERIODICS

CHANGED CIRCUMSTANCES AND RISK ALLOCATION IN CONTRACT LAW

In the European theory of contract law, division of legal systems into open and closed has been recently introduced, according to whether they provide special rules on unilateral revision of contract due to changed circumstances, or not. The open systems contain special rules that allow for a fair adjustment of a valid contract at the request of a party affected by the change in circumstances. The other party does not need to agree to the requested adjustment. The interests of the other party, which is diligent by definition, are protected by setting out the conditions under which the affected party may opt for adjustment. The affected party’s choice between the termination and the adjustment of the contract is not entirely free. The closed systems do not have special rules on the impact of difficulties in fulfilment due to changed circumstances, on the obligations of the contracting parties, or if they do have such rules, they are only allowing the party affected by the change to terminate the contract. The affected party may not force the other party to be bound by the adjusted contract. According to this criterion, Serbian law should be classified as a closed legal system, since it does not allow for the alteration of the contract at the request of the party affected by the change in circumstances, but only at the request, or with the consent of the other contracting party. The creditor faces greater legal uncertainty if his consent is not required for the adjustment of contract by the court. Therefore, this paper discusses the issue of allocation of risk in the context of changed circumstances.

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