From The Archive: Interview with Daniel Jimenez Garcia

Journal Law No. 8525, Section First Person, April 23, 2015, Editorial LAW

The clause rebus sic stantibus has moved to the forefront of legal developments. What is this implicit clause in contracts? What is your relationship with the economic crisis?

This is a legal doctrine of judicial creation that allows modification or judicial termination of a contract by supervening alteration of circumstances taken into account at the time of its conclusion and have led to a disruption of the balance between the contracting parties become excessively the provision for onerous one.

One of the typical cases where an unforeseen change in the circumstances taken into account when concluding the contract is an economic crisis that is unpredictable and can actually occur is the assumption that most habitualidad alleged when the application of the clause arises rebus. The crisis, when they are deep and prolonged effects, can cause an alteration of the circumstances in which the contract was based.But it is not enough to apply the clause. They must be met also traditionally required requirements to be applicable.

The Supreme Court of June 30, 2014 has been a “revolution” in the application of the rebus sic stantibus clause. Why?

In my opinion what is supposed modernization of the doctrine of the clause rebus sic stantibus. This does not result is to produce a generalized and automatic use of it, but the Supreme Court says that its application should be cautious. Perhaps the revolution is that finally this legal doctrine is to be applied in some cases by our courts, which did not happen, because it was considered a dangerous clause.

Why he has led to the Supreme Court ruling of June 30, 2014 a “revolution” in the application of the rebus sic stantibus?

With this ruling, applying a doctrine of “exceptional” happens to be “fully standardized configuration.” It has produced or a significant increase in litigation will occur for this reason?

May increase the number of disputes, but in my opinion what comes to favor is the renegotiation of contracts in cases where it is known that there have been unforeseeable circumstances become uneconomical the contract and is not required that risk I assume only that part. In addition, it should be noted that often the best solution renegotiation is that the closure of a farm or business. Consider, for example in the course analyzes the TS in the judgment of 15 October 2014. If the hotel chain had obtained the rebate that sought at first possibly would not have specified closing hotels and would not have lost jobs or economic activity.

Do you think that will produce an increase in litigation alleging the application of the clause rebus sic stantibus with the new legal doctrine of the Supreme Court?

Although this doctrine is “normalizes” the application of this clause does not operate automatically. What are the requirements or conditions that must be taken into account to successfully allege?

The first thing to say is that your application must be necessarily casuistry. They must meet the traditional requirements of contractual unpredictability and rupture of the economic base of the contract, with the resulting hardship for the affected contractual party. Altering the circumstances must lead to a result of repeated losses or complete disappearance of any profit margin. It must make sense from the point of view of good faith. When out of the agreement without fault of the parties and they suddenly, the circumstances endowed sense base or purpose of the contract change profoundly, the claims of the parties, which according to the principle of good faith be expected in this context they may be subject to adjustment or revision according to the change operated. We must also address the normal business risk and whether this should be taken exclusively or not the party that suffered the adverse consequences.

What are the requirements or conditions to be taken into account to invoke the rebus sic stantibus successfully?

The application of the clause are valued ¿require in each case the economic circumstances? Do you think this can be a problem facing his appreciation by civilian judges, not commercial?

I think not. Our courts are used to resolve lawsuits in which complex economic issues are discussed. In addition, to determine the economic evolution of a business must necessarily provide an accounting expert economic opinion.

What role in these processes the skills of an economic nature?

They are essential, providing an expert opinion is the best way to prove that there has been a supervening alteration of circumstances that has become uneconomical the contract.

With a broad interpretation of this ground for modification or contract termination would not question puts the principle of business risk and operational rules of the market economy?

I do not think that a broad interpretation is intended, on the contrary, are still points to be applied prudently. In my opinion, what has been done is to revitalize a legal doctrine that only applied and which in some cases, has full legal sense.

The application of the clause rebus gains strength for contracts concluded prior to the economic crisis, which has very high standards what do you think will happen next? Will it still be useful in the future when the effects of the crisis happen?

I think that will also apply to other cases in which the alteration of circumstances is not motivated by an economic crisis but by other unforeseen and unforeseeable factors. For example, natural disasters, radical legislative changes, energy crises, etc.

The application of the rebus sic stantibus clause it continue to be useful in the future when the effects of the crisis happen?

It would be reversible application of the clause rebus sic stantibus?

Indeed, the contract amendment only makes sense, when we talk about situations of economic crisis, when performed temporarily. This was understood by the Supreme Court in its judgment of 15 October 2014, which limited the reduction of the income of the hotel building, the time period between the date of filing of the application and 31 December 2015.