CHANGE OF CIRCUMSTANCES UNDER ETHIOPIAN CONTRACT LAW: 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.