Adapting Contracts to the Unforeseeable: The Application of the Cláusula Rebus Sic Stantibus

Rebus sic stantibus is a legal doctrine that allows for the review or modification of a contract when, after its execution, unforeseeable and extraordinary circumstances arise which fundamentally disrupt the contractual balance between the parties. Originating in case law and applied with considerable caution by the Spanish courts, this principle has gained particular relevance during times of crisis, such as economic recessions, the COVID-19 pandemic, or extreme events such as the DANA. Today, the legal profession continues to call for its express incorporation into Spanish law in order to provide greater legal certainty.

But let us proceed step by step…

What exactly is the Cláusula Rebus Sic Stantibus?

The literal meaning of rebus sic stantibus is “things thus standing”. It is a jurisprudential doctrine which enables the review or adaptation of a contract where unforeseeable and extraordinary circumstances occur, undermining the balance of the agreement as originally concluded. In this respect, it constitutes an exception to the general principle of private law known as pacta sunt servanda (“agreements must be kept”).

Whilst pacta sunt servanda imposes strict compliance with contractual obligations, rebus sic stantibus introduces an equitable limitation: contracts must be observed provided that the fundamental circumstances existing at the time of their conclusion remain unchanged. Except in contracts of risk or insurance, no party can reasonably be expected to contract against future misfortunes or disasters which have not yet occurred and could not have been foreseen.

The purpose of the doctrine is not to undermine legal certainty nor to encourage non-performance, but to restore contractual equilibrium when extraordinary, unforeseeable events—beyond the will of the parties—render performance excessively onerous for one of them. In this way, the law is capable of adapting to social and economic realities, protecting the parties against unfair outcomes.

Requirements for Its Application

The application of the doctrine is by no means automatic; it requires strict conditions to be met:

• Extraordinary alteration of circumstances: the supervening facts must be exceptional and not part of the normal contractual risk.

• Radical unforeseeability: the events could not reasonably have been anticipated at the time of conclusion.

• Disproportionate imbalance: the change must impose an excessive burden on one party, disrupting the economic balance of the contract.

• Absence of alternative remedies: there must be no other contractual or legal mechanism to address the situation.

• Relevance to long-term contracts: it is typically applied in contracts of successive performance or long duration.

It is worth stressing that Spanish case law has consistently held that ordinary difficulties or a mere reduction in profit margins are not sufficient to trigger the doctrine. Instead, there must be intolerable loss or a substantial frustration of the contract’s economic purpose—as occurred, for example, in commercial leases during the COVID-19 lockdowns and, more recently, following the flooding caused by the DANA in Valencia.

Distinction from Other Legal Doctrines

Rebus sic stantibus must be distinguished from other legal concepts:

• Contractual termination (Article 1,124 CC): concerned with breach in relation to contractual purpose, unlike rebus sic stantibus, which focuses on extraordinary circumstances rendering performance disproportionately onerous.

• Force majeure or fortuitous event (Article 1,105 CC): these exclude liability where performance has become impossible due to an unavoidable or unforeseeable event. By contrast, rebus sic stantibus applies when performance is still possible, but at an exorbitant cost.

• Supervening impossibility: results in termination of the contract owing to the disappearance of the contractual obligation itself, whereas rebus sic stantibus seeks a fair and flexible adjustment to preserve the contract.

Such distinctions are vital, since only a careful and detailed legal analysis will determine the correct strategy and significantly enhance the prospects of a successful claim.

Recent Developments: Case Law and Legislative Proposals

Traditionally, Spanish jurisprudence has applied rebus sic stantibus restrictively, limiting its use to exceptional cases involving unforeseeable and radical changes. However, the Supreme Court judgment of 30 June 2014 (Civil Chamber, No. 333/2014) marked a turning point. The Court recognised that the doctrine should be applied in a more standardised manner, particularly in long-term contracts, in order to prevent unjust enrichment and safeguard the functionality of contractual relationships.

The economic crisis of 2008, the COVID-19 pandemic, and most recently the DANA floods in Valencia, have all acted as catalysts in the development of the doctrine. During the pandemic, several Spanish courts applied rebus sic stantibus to commercial leases, reducing rents or suspending payment obligations for the duration of government restrictions. These decisions have contributed to a more pragmatic and realistic interpretation, which is likely to continue consolidating.

In today’s globalised world, where unforeseen disruptions can simultaneously impact multiple sectors, the need for a robust legal framework expressly recognising rebus sic stantibus is increasingly evident. Such a framework would provide both legal certainty and predictability in contracts faced with extraordinary circumstances.

In January 2025, the General Council of Spanish Lawyers, together with several professional associations, launched the so-called “Valencia Declaration”, advocating for the incorporation of rebus sic stantibus into the Civil Code and the Civil Procedure Act. The proposal calls for:

• An obligation on the parties to renegotiate in the event of unforeseeable alterations.

• A power for the courts to adapt or terminate contracts where no agreement can be reached.

• Recognition of the temporary and exceptional nature of the doctrine.

The legal profession points out that countries such as Germany, Italy, France, and Portugal already provide explicit statutory recognition of similar principles, thereby ensuring greater legal certainty in cases of contractual imbalance. By contrast, Spain continues to rely solely on judicial interpretation, generating uncertainty for businesses and individuals alike.

The debate remains open: some argue that jurisprudential flexibility is sufficient, whilst others insist that clear legislative regulation would prevent unnecessary litigation and enhance legal predictability—especially in the face of recurrent crises, whether natural disasters, economic downturns, or public health emergencies.

Practical Conclusions and Expert Legal Advice

The doctrine of rebus sic stantibus has become an essential tool for safeguarding contractual relationships in times of crisis. Its proper invocation demands rigorous legal analysis, tailored to the specific circumstances of each case.

At Ayuela Jiménez Abogados, we have extensive experience in civil law and contract law, advising both companies and individuals on the review and renegotiation of contracts affected by extraordinary circumstances.

If you require legal guidance on the application of rebus sic stantibus or wish to defend your interests in litigation, our team of specialist lawyers is at your service.

Trust Ayuela Jiménez to ensure that your contracts enjoy the security and protection they require in times of uncertainty.