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- Introduction to "Alteração das Circunstâncias": The concept of "change of circumstances" is a general institute addressing significant modifications in contract conditions due to external, unforeseen events, potentially leading to contract adaptation, suspension, or termination. It primarily aims to resolve situations of supervening onerousness (excessive burden) rather than absolute impossibility.
- Framework in Administrative Law: Historically accepted through the theory of unforeseeability (Conseil D'État, 1916), the institute is now referenced in arts. 312º and 314º/2 of the Public Contracts Code (CCP), emphasizing principles of good faith and financial equilibrium.
- Key Assumptions: The change must stem from an unforeseen, unforeseeable, and uncontrollable external event, causing abnormal damage exceeding normal contract risks and gravely affecting good faith. In administrative contracts, modification is preferred over resolution to maintain public service.
- "Caso de Força Maior" and "Caso Imprevisto":
- Force Majeure: Implies absolute impossibility of performance (temporary or definitive), leading to contract suspension (art. 297º CCP) or resolution (art. 330º/a CCP).
- Unforeseen Event: Involves increased onerousness, not impossibility. Leads to financial rebalancing, price revision, or indemnification (art. 312º/a + 312º/2, 3 CCP for modification; art. 332º/1/a + 335º/1 CCP for resolution).
- Distinction between "Alteração das Circunstâncias" and "Reposição do Equilíbrio Financeiro":
- Change of Circumstances: Applies when the perturbation is not imputable to any party. Results in partial compensation based on equity (art. 314º/2 CCP).
- Financial Rebalancing: Applies when the perturbation is imputable to one party, typically a voluntary administrative act or "facto do príncipe" (act of the prince). Leads to full compensation, covering emergent damages and lost profits (art. 314º/1/a, b CCP).
- Consequences of Change of Circumstances: Includes the right to suspend (art. 297º CCP), modify (art. 311º/2 CCP), or resolve the contract (art. 332º CCP), and to receive financial compensation based on equity (art. 314º/2 CCP). Contract modification is generally preferred, and a special duty of collaboration (art. 289º CCP) is crucial.
- Contracts During/After the Pandemic:
- No specific pandemic clauses: For contracts entered during the pandemic without specific provisions, a flexible interpretation of "unforeseeability" is argued. Even if the pandemic itself is known, its evolving impacts (e.g., new lockdowns) can be considered unforeseeable, justifying equitable compensation (art. 314º/2 CCP) due to shared risk.
- Specific pandemic clauses: "Hardship" or force majeure clauses are subject to limits of contractual freedom. Clauses that totally exclude the pandemic as a trigger for "change of circumstances" or unilaterally shift all related risks (e.g., increased costs) onto one party are deemed null if they violate principles of good faith, financial equilibrium, proportionality, or public order (arts. 294º, 280º, 281º CC; arts. 1º-A CCP, 7º, 10º CPA). However, clauses defining determinable risk allocations are generally admissible.