CHANGE OF CIRCUMSTANCES AND HYBRID CONTRACTS

Abstract

What should be the legal response to the alteration of the ability for one party to make a profit out of the contract either caused by the other party’s actions or by market evolutions? English contract law has never seen the former as a breach of contract and the latter as sufficient to discharge the contract. However, contracts like franchises and joint ventures differ from the exchange model on which English law was built, as they aim at the creation of wealth to the benefit of all parties without amounting to a partnership. I argue that the existence of this common interest calls for an implied obligation not to alter the profitability of the contract, an implied obligation to restore the adequacy of the terms of the contract to the common project, and the right to terminate the contract if the renegotiation fails even without breach by either party.