storing Contractual Balance in the Face of Hardship: An Analytical Study in Light of the Principles of International Commercial Contracts

Abstract

This study analyzes the mechanism of contractual rebalancing in response to hardship in international commercial contracts, with a focus on renegotiation as a flexible legal instrument aimed at preserving contract continuity without undermining the principle of binding force. The study adopts a descriptive-analytical methodology through examining the 2016 UNIDROIT Principles texts, international arbitral precedents, and comparative jurisprudence. The findings reveal that renegotiation does not constitute an exception to the principle of party autonomy but rather represents its evolved embodiment, seeking to restore the contract to its original economic assumptions at formation, while applying a flexible objective expectation standard that considers what a reasonable professional would anticipate under prevailing circumstances without ignoring parties' specific characteristics. The study further demonstrates the flexibility of remedies following hardship, where suspension or modification of obligations takes precedence while deferred termination remains an exceptional solution. The study recommends precise regulation of renegotiation clauses in international contracts, adoption of a flexible objective expectation standard in national legislation, strengthening the role of obligation suspension as a tool for managing temporary economic risks, leveraging UNIDROIT Principles as an interpretive reference, and developing Arab legislative texts on exceptional circumstances in alignment with the modern evolution of hardship theory. The study's originality lies in shifting focus from the procedural formalities of renegotiation to analyzing its substantive purpose—contractual rebalancing—while critically bridging contractual theory and practical application through international arbitral precedents, thereby bridging the gap between limited theoretical discourse and growing practical application in this field.