11 Hardship, Impracticability, Unconscionability, Unforeseeability
  • 1 0000000404811396https://isni.org/isni/0000000404811396International Monetary Fund

Abstract

Fluctuations in exchange rates can have disturbing and even catastrophic effects on contracts, particularly if performance is necessary over a long period or at a time far ahead. As a consequence, what are known as hardship clauses have become common.1 A hardship clause can be described as a term of a contract under which the contract can be reviewed if a change in circumstances occurs that fundamentally modifies the initial balance between the obligations of the parties, so that performance, though not impossible, becomes unusually onerous for one party.