Rebus Sic Stantibus

Rebus Sic Stantibus is a legal principle that allows for the modification or termination of a contract when the fundamental circumstances under which it was agreed upon have changed significantly. This maxim implies that the obligations of the parties can be altered if the conditions that originally justified the contract no longer hold true.

The maxim derives from Roman law, where it was utilized to ensure that agreements remained fair and equitable as circumstances evolved. Its roots can be traced back to legal traditions that demanded adaptability in contractual obligations.

In contemporary legal practice, Rebus Sic Stantibus is often applied in cases of fundamental change in circumstances, such as economic changes, natural disasters, or pandemics that affect performance. Courts may invoke this principle to adjust contractual obligations to reflect the new realities faced by the parties.

• A construction contract may be modified if a new law makes it illegal to use a certain material initially specified in the contract.
• A lease agreement may be terminated if a government order necessitates the closure of the leased property, altering the fundamental purpose of the lease.

• Alfred McAlpine Construction Ltd v. Panatown Ltd [2001] UKHL 64