Hardship clause
A contractual clause allowing renegotiation when a change in circumstances makes performance excessively onerous for one party.
A hardship clause provides for the possibility of renegotiating the contract when a fundamental change in circumstances, unforeseen at the time of conclusion, makes performance excessively onerous for one party without making it impossible.
Unlike force majeure (which makes performance impossible), hardship maintains the possibility of performance but at a disproportionate cost. The ICC has published a model clause (ICC Hardship Clause 2020) adapted to international trade.
The typical mechanism provides for:
- Notification: the affected party informs the other of the change in circumstances
- Renegotiation: parties attempt to find an adapted agreement within a set timeframe
- Recourse: if negotiations fail, contract termination or submission to a third party (arbitrator, expert)
This clause is essential in long-term contracts (distribution, supply, construction) exposed to fluctuations in raw materials, exchange rates or regulations.
The UNIDROIT Principles of International Commercial Contracts (Articles 6.2.1 to 6.2.3) provide a comprehensive framework for hardship that is widely referenced in international practice.