Change of Circumstances in Contract Law: The Korean Approach
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This article starts with a brief summary of the principle of change of circumstances as it is recognized in a number of jurisdictions such as Germany, Japan, and the United States, all of which have influenced the Korean legal system to varying extents, and then goes on to summarize the development of as well as academic theories and case law pertaining to the principle in Korea. In doing so, this article concludes that in contrast to the courts in the abovementioned jurisdictions, most of which explicitly recognize the principle of change of circumstances through statutory and/or case law, the principle has not been codified in the Korean Civil Code and Korean courts have also as a general rule declined to accept change of circumstances as a valid defense to a breach of contract claim. Nevertheless, this article takes note of the fact that both the Korean Civil Code and Korean courts do recognize the principle of change of circumstances in certain exceptional circumstances. On that note, this article suggests that the Korean legislative branch should strongly consider codifying the principle of change of circumstances in the Civil Code in order to provide contracting parties with greater flexibility in dealing with unforeseeable risks.
Abstract
This article starts with a brief summary of the principle of change of circumstances as it is recognized in a number of jurisdictions such as Germany, Japan, and the United States, all of which have influenced the Korean legal system to varying extents, and then goes on to summarize the development of as well as academic theories and case law pertaining to the principle in Korea. In doing so, this article concludes that in contrast to the courts in the abovementioned jurisdictions, most of which explicitly recognize the principle of change of circumstances through statutory and/or case law, the principle has not been codified in the Korean Civil Code and Korean courts have also as a general rule declined to accept change of circumstances as a valid defense to a breach of contract claim. Nevertheless, this article takes note of the fact that both the Korean Civil Code and Korean courts do recognize the principle of change of circumstances in certain exceptional circumstances. On that note, this article suggests that the Korean legislative branch should strongly consider codifying the principle of change of circumstances in the Civil Code in order to provide contracting parties with greater flexibility in dealing with unforeseeable risks.
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