Global financial crisis, the coronavirus pandemic, war and what else is (not) considered a significant change in circumstances (Article 652 of the Civil Code of Ukraine)

Abstract

The study is devoted to Article 652 of the Civil Code of Ukraine, according to which a party has the right to demand termination or amendment of the contract if the circumstances have changed funda­mentally compared to what they were at the time of the contract conclusion. This Article is one of those that parties to contractual disputes invoke very often, but almost never successfully. The purpose of this paper is to try to explore the reasons for this pheno­menon in Ukrainian judicial practice and to outline the conditions under which one can count on success in proving that the circumstances have changed substan­tially enough to meet the conditions for application of Article 652 of the Civil Code of Ukraine. Methodo­logically, the study is based on the analysis of the practice of the highest courts of Ukraine with inclusions of the comparative legal method and references to the rules of international contract law and the practice of other jurisdictions. In the first, theoretical part of the study, the author offers a general explanation of what a fundamental change of circumstances is and what role it plays in the dynamics of contractual relations between the parties. The author compares a fundamental change of circumstances with force majeure. Next, five conditions for the applicability of Article 652 of the Civil Code of Ukraine were consi­dered and commented on. It is followed by an analysis of significant categories of cases that illustrate the difficulty in proving a fundamental change of circumstances. These are cases related to such historical events as the global financial crisis of 2008, the ban on gambling in Ukraine in 2009, the nationalisation of Privatbank in 2016, the coronavirus pandemic and related quarantine restrictions, and finally the war and the full-scale invasion of the Russian Federation into Ukraine. The review and critical analysis of landmark court decisions makes it possible to give concrete meaning to the elements of a fundamental change of circumstances with specific content and to identify trends that have marked themselves in the judicial practice.