SECTION 1. APPROACH OF THE CONCEPT OF CONTRACTUAL
UNPREDICTABILITY
IN GENERAL 23
This section covers the recognition of the
concept of contractual unpredictability under Rwandan law and its legal basis,
the conditions of its application and the effect of circumstances on the
contract and the contractual waive of the benefit of
unpredictability. 23
1.1. Recognition of the concept 23
1.2. Legal Basis: good faith 24
1.3. The conditions of application 25
1.3 Effect of circumstances on the contract: risk analysis 30
Categories of unpredictability can be a predefined processing at
the contract, but in the absence of such provisions the question arises: to
what extent gross imbalance of a contract resulting from a change after the
formation of the contract and up to cause the ruin of one party allows the
latter to get free or to renegotiate
it. 30
1.4. The parties may waive in the contract the benefit of
unpredictability? 33
SECTION 2. OPPORTUNITY OF A CHANGE UNDER RWANDAN LAW 33
2.1 Equity and social norms 33
2.2. Contractual economy 34
2.3 The legal security 35
CHAPTER III. RESTORATION OF THE BALANCE OF CONTRACT 37
SECTION 1. GOOD FAITH IN CONTRACTUAL RELATIONS 37
1.1. The concept of good faith 37
1.2. Good faith in the contractual process 38
1. 3. Sanction of violation of good faith 41
SECTION 2. OTHER DUTIES OF CONTRACTORS 42
2.1. The duty of loyalty and cooperation 42
2. 2. The duty of information 43
SECTION 3. JUDGE TO RESTORE DE FACTO EQUALITY 44
3.2. The intervention of the judge in contractual relations 45
3.2. Maintaining a de facto equality 47
3.3. Nature of the legal effects 47
viii
3.4. Criteria and measures of burden sharing between the
contractors 48
CONCLUSION AND RECOMMANDATIONS 49
BIBLIOGRAPHY 52
1
GENERAL INTRODUCTION
I. PRESENTATION OF THE TOPIC
Life in society cannot exist without establishing the legal
and most often contractual relations. It has long been recognized that the free
play of individual wills can achieve justice1. This is the principle
of contractual freedom and autonomy of the will which admits that the only
contractors will create themselves, the contract and any effects arising there
from2.
The principle of legality enshrined in contractual matter, CCB
III Article 33, states that agreements legally formed become a law for those
who have entered into them. Thus, persons who have agreed on the basis of this
principle should respect their commitments.
The aforementioned article by stating the binding force of
contract puts the parties' agreement on the same level as a decision emanating
from the law and that thus, no one even the judge has power to revise the
current contract even if circumstances have changed and regardless of the
imbalance that could have resulted from the mutual benefits.
In the execution of the contract, another basic principle of
action is implicitly covered by Article 46 of the CCB III which states that "in
case of impossibility no person shall be liable3 . This article
justifies that it should be no damages when, as a result of force majeure or
unforeseeable circumstances, the debtor was unable to give or do what he/she
had to, or have done what was
1 N. UWIMANA, De la force majeure comme cause de
la libération du débiteur en droit positif rwandais,
Mémoire, Butare, UNR, Faculté de Droit, 2003, p.1.
2 A.M. NGAGI, Droit civil des obligations,
Butare, UNR, 2004, pp.22.
3 D. RENE, Précis de droit civil
belge, T.II, Bruxelles, Ets. Bruylant, 1955, p.335.
2
forbidden.This is therefore an impossibility of performance as
exception to the agreed commitments4.
When an inverse theory for judicial intervention in the life
of the contract was drafted and discussed by most authors5 as the
contract equilibrium in case the upheaval of the contractual economy is due to
changed circumstances, the theory being understood as a theory under which the
judge must restore the balance of a contract whose performance conditions have
been severely altered to the detriment of one party to the sequence of events
reasonably unpredictable at the conclusion of the convention6.
The basis of the principle of contractual balance consists of
the correlation between the obligations and benefits of the convention, to
maintain equivalence between benefits and burdens as it had been calculated at
the conclusion of contract7.
And, it is because there is a common measure between the
benefits and price, that the parties conclude the contract. In contracts,
changes in obligations of one party are expected to be admitted and the initial
equilibrium could be broken to the disadvantage of that party to the
contract8.
Therefore, the present work offers a detailed study of
"Case-law based analysis of contractual unpredictability under Rwandan law."
4 M. BAHUFITE, De la théorie de
l'imprévision comme exception à la force obligatoire des contrats
en droit positif rwandais, mémoire, Butare, UNR, Faculté de
Droit, 1989, p.1.
5 Some of these authors are: M. PLANIOL , G.
RIPERT, R. SAVATIER and G.M. SEN cited by D.M. PHILPPE, «Les clauses de
force majeure, imprévision et de transfert des risques» in Les
clauses applicables en cas d'inexécution des obligations
contractuelles, Bruxelles, La charte, 2001, p. 34.
6 G. CARLE, et al., La fin du contrat,
Bruxelles, A.B.J.E, 1993, p. 69.
7 M.A. FLAMME, Droit administratif, T. 3,
Bruxelles, P.U.B, 1982-1983, p. 45.
8 A. BASOMINGERA, Cours de droit
administratif, Notes de cours, Butare, UNR, Faculté de Droit,
2002-2003, p. 53.
3
II. STATEMENT OF THE PROBLEM
Article 33 CCB III underscores the binding character of the
contract on both parties. It is the application of the Latin maxim "pacta
sunt servanda". Thus, the contract remains binding until the time the
parties have not by agreement, changed its content9. In principle,
the agreement is the law of parties, whatever the changing circumstances and
unpredictability is only a theory'0.
Through the turbulent times that are ours, shaken by economic,
technological, political upheaval and others, this solution is not without
drawbacks. The contractors come to assume commitments disproportionate to their
return, or be stuck in the legal ties that lost all economic value due to the
occurrence of an event reasonably unforeseeable at the time of conclusion of
the contract. The phenomenon is aggravated by the multiplication of long-term
contracts, particularly vulnerable to changing circumstances''.
It is essential to point out important points of the problem
we propose to analyze in this work. When after the conclusion of a contract,
circumstances arise and increase considerably the obligations of any of the
contractors; contractual commitments they assumed could be modified or
terminated?
Should we allow the dissolution or amendment of the contract
that without making it impossible to enforce contractual obligation, the change
in circumstances radically transformed this obligation?
Is it not contrary to equity to be borne by one party only the
costs arising from risks that have not been subject to any contractual
allocation?
9 A.M. NGAGI, op cit, p. 61
10 D. RENE, op cit, p. 336.
11 D. RENE, op cit, p. 336.
4
If we refuse to recognize a legal institution that organizes
the contractual unpredictability, we can achieve solutions that this legal
concept would be adapted by a broad interpretation of legal institutions
nearby?
These are questions that will concern my research throughout
this work and that we have the task to provide possible answers.
III. HYPOTHESIS
A strict interpretation of the principle Pacta sunt
servanda has the advantage of clarity of legal remedies and thus the
likely decline in litigation. But, the recognition of the contractual
unpredictability will provide a more adequate burden sharing among contractors,
and burden sharing should reduce the risk and should provide a greater economic
stability.
IV. CHOICE AND INTEREST OF TOPIC
The choice of the topic "Case-law based analysis of
contractual unpredictability under Rwandan law" was motivated by a desire to
contribute to the development and understanding of our law of contract
specifically on point concerning contract enforcement.
This topic is of great interest:
- It facilitates our judges to understand and interpret the
various rules of contract law to resolve various disputes inherent in the
execution of contracts.
- On the side of lawyers, they will be awakened to look for
more suitable solutions for problems related to the unpredictability in
contractual relation.
- Finally, the issue illuminates the path for future
researchers.
V. 5
DELIMITATION AND SUBDIVISION OF THE WORK
Our subject is in the field of law of obligations. The first
chapter deals with general considerations of contractual unpredictability. The
second chapter is devoted to the case-law based analysis of contractual
unpredictability under Rwandan law. The last chapter discusses the restoration
of the balance of contract by recognizing certain remedies. In the end, it will
be the general conclusion.
VI. RESEARCH METHODOLOGY
In our work, it is useful to apply different techniques and
methods, tools necessary to look for, where:
The technical documentation allowed us to gather the documents
and be able to select what was most certainly useful for us in connection with
our subject.
As to methods, first the analytical method helped us to do a
thorough analysis of the readings i.e books, legal texts, decided cases,
etc.
Then, the exegetical method allowed us to see what the role of
soft laws on contracts was and check whether there have been used
simultaneously with mandatory laws in the interpretation of contracts.
And comparative and historical method helped me to compare
laws, decided cases and legal writings from different legal systems before
applying them to my research.
In the end, with the synthetic method, we can identify at a
glance what is important for our subject, to lighten the information
gathered.
6
CHAPTER I. GENERAL CONSIDERATIONS OF
CONTRACTUAL
UNPREDICTABILITY
It was held that the contractual unpredictability has a moral
base and others said that it is against it, it has also been argued that its
application suffers legal certainty on the other side it has said it aims to
consolidate it12.
Those who argue that the whole theory of unpredictability is
the immoral matter, say that if the parties have taken into account certain
model for their contract, depart from them by application of unpredictability
would be something immoral which is contrary to their intention when they were
contracting13.
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