Certainty over clemency: English contract law in the face of financial crisis

Abstract

This chapter has the objective to consider the legal implications of negative economic trends under English contract law in the aftermath of the global Financial Crisis of 2007–2008. Unlike other jurisdictions, most notably in civil law countries, the English position in the law governing a fundamental change in circumstances has remained narrow, that is, no relief will be granted unless it is an exceptional situation. The English courts deal with the issue either by the doctrine of frustration or through construing contractual force majeure provisions. Following the crisis, indeed there have been an increasing number of cases going down these avenues. Apart from relying on frustration or force majeure clause, another emerging phenomenon is that there has been a growth in allegations of misrepresentation and therefore requesting a rescission of contract. In either case, the aim of claimants is apparently trying to bring the contractual obligations to an end.