Change of Circumstances Under Ethiopian Contract Laws: A Comparative Analysis With The Approaches of Other Jurisdictions

Abstract

The famous legal maxim- pacta sunt servanda represents the principle of the binding force of a contract, which dictates that the contracting parties are fully bound by the terms and conditions of their contract. In most jurisdictions, less controversial exceptions to the principle of the binding force of a contract have been allowed, such as where the performance of the obligation by a party becomes impossible because of objective circumstances. However, there are ongoing debates as to the measures to be taken where the unforeseen change of circumstances only renders the performance by a party more onerous or cumbersome without making it objectively impossible. This article seeks to examine the varying approaches that the Ethiopian legal system and some selected foreign jurisdictions have adopted to address the controversy. Drawn on comparative doctrinal research methodology, it finds, among others, that the Ethiopian laws unqualifiedly subscribe to the classic thinking of strict enforcements of contracts. With this, the law implies that the effects of a change of circumstances should be regulated by the contracting parties and not by the courts.