The Renegotiation in Change of Circumstances

The Chinese Civil Code has added the rule that an unfavorable party may request renegotiation in change of circumstances. However, the existing doctrines characterizing renegotiation as an obligation of performance, an obligation to oneself, or a collateral obligation are not reasonable. And the doctrine of the right to renegotiate is even more contrary to the civil law system. Renegotiation does not promote private autonomy and the principle “pacta sunt servanda”, as might be expected, but rather may lead to a greater bargaining advantage for the party benefiting from the change of circumstances and increase judicial costs. The need for renegotiation cannot be justified from the perspective of legal economics and comparative law. A change of circumstances does not necessarily require renegotiation, and how to renegotiate and the consequences of not renegotiating are not clear in the current legal system. Renegotiation should be regarded as mere an appeal from the law and removed from the discussion of rights and obligations.