Case-law based analysis of contractual unpredictability under rwandan law

NATIONAL UNIVERSITY OF RWANDA

FACULTY OF LAW

P.O Box 117 BUTARE

CASE-LAW BASED ANALYSIS OF CONTRACTUAL UNPREDICTABILITY UNDER RWANDAN LAW

A dissertation written and presented in partial

fulfillment for the
requirement of the Award of a Bachelor's Degree in Law (LLB)

By: NGENZI Octave

Director: Me MBEMBE Binda Elvis and

Mr. SEBUCENSHA Leonard

Huye, October, 2011

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DEDICATION

To my lovely mother and father and all my family members, this dissertation is dedicated.

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DECLARATION

I, Octave NGENZI, declare that the work presented in this memoire (dissertation) is original. To the best of my knowledge, information and belief, it has never been presented anywhere in the National University of Rwanda or in any other universities and various institutions. In case where other individual's work has been used, references have been provided and in some instances quotations have been made. It is on this note that I declare that this work is presented as one of my own efforts and contributing to the fulfilment of a Bachelor's degree in Law (LLB).

Signed:

Date: October 2011

ACKNOWLEDGEMENTS

This dissertation is the product of my own contribution and good assistance rendered to me by several persons. Therefore, I stand to convey my sincere gratitude to those who rendered help in one way or another.

First of all I owe my thanks giving to my good Lord for his goodness in enabling me to finish this dissertation.

I would like to extend my appreciation to my supervisor Me MBEMBE Binda Elvis and Mr. Leonard SEBUCENSHA for the technical help, advice and guidance, council and encouragement, which enabled me to gather and put down together my ideas.

I would like also to convey many thanks to my family especially my late sister Marie Claire INGABIRE and all members of my family for the support and love they extended to me. Their encouragement and understanding have been an inspiration to me throughout my time at the University.

I wish to extend my thanks to the National University of Rwanda and especially to the Faculty of Law for enabling me to accomplish my studies. Thanks also go to various lecturers of the faculty for having facilitated my study in one way or another. I owe a lot of gratitude to the US Embassy library staff and my fellow students who constantly boosted my zeal and encouragement and good company at all times.

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NGENZI Octave

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ABREVIATIONS

Art : Article

B.O. : Bulletin Officiel

Cass. Civ. : Cassation Civile

CCB I : Civil Code Book I

CCB III : Civil Code Book III

Cons. D'Et. : Conseil d'Etat

D. : Dalloz

Ed. : Edition

Et al : Et alii /alia (and the others)

Ets : Etablissement

Ibid : Ibidem (Same book, same page)

Id. : Idem (Same book, different page)

No : Number

NUR : National University of Rwanda

O. G : Official Gazette

Op cit : Opera citate (Already mentioned)

Para : Paragraph

RC : Rôle Civil

RCA : Rôle Civil en Appel

T.

V

: Tome

U. K : United Kingdom

UNR : Université Nationale du Rwanda

V. : Volume

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TABLE OF CONTENT

DEDICATION i

DECLARATION ii

ACKNOWLEDGEMENTS iii

ABREVIATIONS iv

GENERAL INTRODUCTION 1

I. PRESENTATION OF THE TOPIC 1

II. STATEMENT OF THE PROBLEM 3

III. HYPOTHESIS 4

IV. CHOICE AND INTEREST OF TOPIC 4

V. DELIMITATION AND SUBDIVISION OF THE WORK 5

VI. RESEARCH METHODOLOGY 5

CHAPTER I. GENERAL CONSIDERATIONS OF CONTRACTUAL UNPREDICTABILITY 6

SECTION 1. OVERVIEW OF THE THEORY OF UNPREDICTABILITY 6

1.1. Concept of contractual unpredictability 6

1.2. Legal basis of the theory 7

1.3. The theory of unpredictability 8

SECTION 2. NEIGHBOURING CONCEPTS OF CONTRACTUAL UNPREDICTABILITY

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2.1. Force majeure 12

2.2. The interpretation 13

2.3. Good faith 15

2.4. Lesion 15

2.5. Acts of government 16

2.6. Abuse of law 17

2.7. The cause 18

SECTION 3. SPECIFIC HYPOTHESIS ON CONTRACTUAL UNPREDICTABILITY 18

3.1. Disappearance of the function of the contract 18

3.2. Imbalance of benefits 19

CHAPTER II. CASE LAW BASED ANALYSIS OF CONTRACTUAL UNPREDICTABILITY

UNDER RWANDAN 23

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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

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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.

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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.

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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.

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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.

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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.

SECTION 1. OVERVIEW OF THE THEORY OF UNPREDICTABILITY

At first glance, the notion of unpredictability is not based on any text under positive law in Rwanda that is why it is important to begin this section with the notion of contractual unpredictability.

1.1. Concept of contractual unpredictability

The litigation of unpredictability seems, at present, to constitute a special problem, despite the continuation of the discussions on this theory in many legal systems. However, despite the general idea of unpredictability, none of the arguments made by the authors for or against this theory seems to have totally won the adherence of the courts¹⁴.

¹²L. J. AUBERT, Les contrats, Paris, Dalloz, 1996, p.134.

¹³ X. «Theory of unpredictability», available at http://www.centrorisorse.org/theory-of-unpredictability.html, accessed on 4^th September 2011

¹⁴ P. GUIHO, Cours de droit civil. Les obligations, 2^ème éd., V. 4, Lyon, L'Hermès, 1984, p. 89.

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R. GUILLIEN and J. VINCENT define unpredictability as a theory under which the judge must restore the balance of a contract that its performance conditions have been severely altered to the detriment of one party as a result of events reasonably unforeseeable at the time of conclusion of the contract'⁵. For the repertory of civil law, the unpredictability consists in that, by the effect of economic circumstances which do not constitute a force majeure, the respective value of benefits under the contract is substantially changed and that the balance that parties had to realize was destroyed'⁶.

In summary, the theory of unpredictability would then tend to recognize to the judge the power to review the contract in order to restore the equilibrium in the contract. In this context, we consider contractual unpredictability as consisting in the imbalance of reciprocal benefits which comes to occur in successive contracts or deferred, as a result of extraordinary and abnormal events subsequent to the formation of the contract that are beyond the control of the parties, that it was reasonably impossible to foresee them and it appears certain that the parties would not have contracted if they were able to predict it'⁷.

1.2. Legal basis of the theory

The indemnity granted under the theory of unpredictability allows indeed, preventing the occurrence of an irremediable inability to perform the public service that would result sooner or later, in the persistence of imbalance in contract. It can be argued that the continuity of public service remains the essential basis for the theory of unpredictability'⁸.

¹⁵ R. GUILLIEN et J. VINCENT, op. cit, p. 236.

¹⁶ Répertoire de droit civil, 2^eme éd., Relais Printemps, Paris, Dalloz, ,1983.

¹⁷ H. DE PAGE, Traité élémentaire de droit civil belge: les obligations, T. II, Vol. 2, 3^eme éd., Bruxelles, Ets Bruylant, 1964, n^o 574.

¹⁸ M. WALINE, Traité de droit administratif, Paris, Dalloz, 1963, p.623.

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However, this basis cannot explain alone all the decisions pronounced by the courts. To justify the theory of unpredictability, it was also mentioned, beside the continuity of public services, common notions of administrative law and civil law such as equity and the interpretation of contracts and good faith¹⁹. The basis of this latter concept will be developed in the chapters that will follow.

1.3. The theory of unpredictability

A change in circumstances after the conclusion of the contract that were not foreseen or couldn't logically be expected, may provoke a state of things that make performance a disproportionate pecuniary sacrifice for the debtor, or seriously prejudicial to the creditor. Thus, one of the parties affected by the contingency believing that feels it is unpredictable; it raises the termination of the contract or alters its terms²⁰.

1.3.1. The fate of the contract after contractual unpredictability

In administrative contracts, the obligation is justified by the principle of continuity of public service. Thus, the French Conseil d'Etat refused to compensate the contractor of administration, which had unilaterally terminated the contract²¹. This rule is derogated when the exploitation of public service is, definitively, no longer viable²².

The judge after checking the hypothesis of unpredictability invites the parties to proceed with a layout of contract which would permit its continuation. The renegotiation of the contract, which, in concession, would be a rate increase to

¹⁹ Ibid., see also articles 33 and 34 of CCB III: Good faith, Equity, usage and article 4 of the law n° 12/2007 of 27/03/2007 on public procurement: other legal basis: economy, efficiency and fairness.

²⁰X. Good faith and assurance of the contractual balance, available at www.uab.ro/revise drept/.../30noslacan accessed on 4^th September 2011

²¹ Cons. d'Et., 8 février 1918, société d'éclairage de Poissy.

²² A. BASOMINGERA, op cit, p. 86

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consumers' tariffs, is the way most likely to ensure continuity of public service²³.

1.3.2. Allocation and methods of calculating the compensation

The granting of compensation where there has been an unpredictable event that disrupts the economy will be done by calculating the deficit and depending on the period of deficit.

The delimitation of the period for which compensation may be claimed seems necessary. Compensation shall be limited to deficits of exploitation of the period during which the threshold of disruption of the contractual economy has been achieved²⁴.

To determine the deficit suffered, we will compare the revenue and operating expenses for each exercise.

Exercises that were beneficiaries during the period of upheaval in the economy of contract will not be taken into account; the results of activities considered are those related to the contract²⁵.

The fraction of the deficit due to mismanagement does not enter into account when calculating the extra burden. In case of deficit prior to the disruption of the economy of contract, the judge will compensate only the part of the deficit due to change of circumstances²⁶.

²³ M. WALINE, op. cit, p. 624.

²⁴ A. DE LAUBADERE, op. cit, p. 122.

²⁵ Id. p. 123

²⁶ L. BACH, Droit civil. Les obligations, T.1, 13^eme éd., Paris, Sirey, 1999, p. 422

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The judge will proceed to the distribution of burden on the basis of reasonable interpretation of the contract. He will take into account elements other than those used to determine the disruption of the economy of contract or deficit²⁷.

So the judge will consider:

- Efforts done or negligence committed by one of the contractors;

- The contractor's financial position and profits outside the contract or out of the extra contractual period²⁸.

1.3.3. Several customers to satisfy

If a supplier committed to deliver to several clients a quantity of goods, and as a result of a shortage he is not able to satisfy all his customers, he can ask the judge either to fulfill fully a fraction of his customers, or to satisfy partially all his customers²⁹.

1.4. Specific problem to some contracts such as dietary contracts

This paragraph emphasizes on the alimony paid in the contract of divorce by mutual consent.

1.4.1. Alimony determined in the agreements prior to divorce by mutual consent

It is necessary to distinguish the pension for the maintenance of children on the one hand and on the other hand, for the spouse.

²⁷ G. CARLE et autres, La fin du contrat, Bruxelles, A.B.J.E, 1993, p. 375

²⁸ G. CARLE et autres, op. cit, p. 376

²⁹ Id. p. 578

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a) Alimony allocated to children

The judge may increase the amount paid by debtor of alimony at the request of the spouse who has custody of the child, if s/he is unable to ensure the child maintenance and education required³⁰.

This inability is assessed according to:

- Resources of the parent who has custody, - The amount of the pension.

It is recognized that such alimony may be reviewed depending on the means of the debtor and the creditor needs. Thus in the case of Mrs. M.A and M.T.S, alimony allocated to children have been revised because the husband had found another job³¹.

b) Alimony granted to spouses

The compensatory allowance determined under the agreements prior to divorce by mutual consent cannot, in the absence of contractual provision, be subject to revision. Thus in the case of N.M and F.M the primary court of Kicukiro has refused to modify the alimony awarded to the wife by the husband in the contract signed before referral to the court³².

This is the application to the contract of divorce, principles governing law of contract set out in article 33 of the Civil Code Book III which states that Agreements legally formed become a law for those who have entered into.

³⁰ Article 282 of civil code book I

³¹ RC 0140/07/TB/KCY of 05 September 2007 of district court of Kacyiru, unpublished

³² RC 0039/05/TD/Kro of 30 September 2005 of district court of Kicukiro, unpublished

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1.4.2. Life annuities

A life annuity is an annuity paid periodically until the death of the beneficiary or annuitant. The adjustment of annuities is subject to that of depreciation meaning that they can be modified at any time they seem to have economically lost their normal value. They can be increased or decreased according the value of currency³³.

SECTION 2. NEIGHBOURING CONCEPTS OF CONTRACTUAL UNPREDICTABILITY

As Rwandan law does not have a legal institution organizing the upheaval of the contractual economy, I will sometimes use other concepts to solve problems envisaged in other European countries like Germany. I will analyze successively force majeure, interpretation, good faith, the lesion, the act of government (fait du prince), abuse of law and the cause.

2.1. Force majeure

Force majeure constitutes an event external to the party invoking it, unforeseeable and irresistible, making impossible to fulfill the obligation of the contract. It has the effect of releasing the debtor from his obligation or, if it is a temporary impossibility, suspends the execution of the contract³⁴.

Several authors like P. VOIRIN and A.M. NGAGI have emphasized to the distinction between force majeure and unpredictability. While being a supporter of the unpredictability, P. VOIRIN emphasizes that force majeure does not solve the problems of unpredictability³⁵. Indeed, the sanction which is attached to the force majeure is inadequate. In addition, the person who would

³³ L. BACH, op. cit, p. 495

³⁴ J. CARBONNIER, Droit civil. Les obligations, T.4, Paris, PUF, 1974, n^o 74.

³⁵ P. VOIRIN, De l'imprévision dans les rapports de droit prive, Paris, Dalloz, 1922, p. 123.

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be entitled to rely on unpredictability cannot always establish the existence of his impediment (inability or difficulty in performance)³⁶.

Moreover, the French courts have repeatedly stated that the circumstances making the contract more expensive or more difficult do not constitute a hypothesis of force majeure³⁷. Among the few decisions that have applied the force majeure in the unpredictability, there is an old decision rendered in a hypothesis quite significant.

In April 1842, Merlin-Dispot engaged to establish for a period of two years, taxi driving service between Rouen and Paris, whose correspondents were Robillard and Compagnie. There was no indication at the time to plan, noticed the judge, that the railway construction would already be operational in 1843. The railway was three times faster and twice cheaper than the taxi service³⁸. Then the taxi driving service lost its customers because of that new transport using trains. Seized with the claim, the judge decided to modify the contract in favor of Merlin-Dispot saying that being operational of the railway after one year of the conclusion of the contract constitutes a force majeure for the debtor.

It can be stated that premature use of the railway was to be expected for an experienced professional. The force majeure has been applied in a case where the contract had lost much of its utility for the contractors.

2.2. The interpretation

When the contracting parties have not determined a clear legal regime which must govern their contract, the judge finds the exact meaning and scope of the

³⁶ Ibid.

³⁷ This is a decision of commercial court of Rouen of 28 August 1943, confirmed by the Court of Appeal of Rouen in a decision dated February 9, 1944.

³⁸ J. Carbonnier, op. cit, n^o 66.

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contract in such circumstances. He will refer particularly to the legal provisions governing such contracts, as well as the common intention of the parties³⁹.

In case of unexpected change of circumstances, the judge may choose the equitable solution with reference to the will of the parties.

When the contract is silent, the judge must seek first of all to achieve the right goal inspired by the commutative principle summed up in the doctrine of equivalence⁴⁰. He will give to the general interpretative rules established by our civil code book III in Articles 54 to 58⁴¹, the application they merit, instead of seeing in them only vague ideas and treat them as always negligible. And so, the judge will be a minister of equity, and will honestly serve as social utility.

An interesting decision of the Brussels civil court applied the interpretation in terms of unpredictability⁴². In 1852, the city of Brussels was committed to the municipality of Schaerbeek, at its expense to establish the system of distribution of water throughout the considered urban part of the town; the agreement stated that the inhabitants of Schaerbeek would enjoy the same benefits as those of Brussels. Between 1853 and 1870, the population of Schaerbeek increased from 11,000 to 18,000 inhabitants. The water with which the city of Brussels had the distribution was not possible to cover new needs.

In 1870, the city of Brussels was paying more for water for the inhabitants of Schaerbeek than those inhabitants of Brussels. The municipality of Schaerbeek assigned the city of Brussels for breach of its contractual obligations. The judgment rejected the interpretation given to the convention by the municipality of Schaerbeek. The city of Brussels has acted; the judge

³⁹ Art 54 of decree of 30 July 1888 establishing civil code book III

⁴⁰ J. PINEAU, Théorie des obligations, Montréal, Les Editions Thémis Inc., 1979, p. 115.

⁴¹ Art 54: We must, in the conventions, look what was the common intention of the contracting parties, instead of to the literal meaning of words. Art 56: Words susceptible of two meanings should be taken in the direction that best suits the subject of the contract.

⁴² Civ. Bruxelles, 24 mai 1884

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considered, with the purpose of benevolence and humanity, it would also be contrary to equity and the spirit of the convention to subject it to burdens for which are subjected the work done for the purpose of speculation, and making it responsible for a lack of water that neither party had expected⁴³.

2.3. Good faith

Conventions must be executed in good faith⁴⁴ that is to say according to intention of the parties and the purpose for which they were formed.

Ghestin defines good faith as the consideration of a requirement of loyalty, by which the degree, but not the principle, can be defined by the legislator or otherwise, determined by the case law from usage, and generally from good contractual practices⁴⁵. Good faith is seen therefore as the mere basis of the theory of unpredictability, it is argued that the good faith elaborated in article 33 of our civil code book three obliges parties to modify the contract if an unpredictable event comes to alter its economy during its execution.

2.4. Lesion

J. Carbonnier wrote that lesion is the financial loss caused to any party, of inequality of value between the benefits⁴⁶.

The lesion is the objective imbalance of benefits of the contract. The contractual unpredictability is not only inequality in value between the benefits, but the disappearance of function of the contract in general, regardless of its origin. In addition, the contractual unpredictability applies in case of changed circumstances after the conclusion of the contract⁴⁷.

⁴³ Civ. Bruxelles, 24 mai 1884, op. cit.

⁴⁴ Art 33 CCB III Para 3

⁴⁵ J. GHESTIN, La notion d'erreur en droit français, Paris, Dalloz, 1963, p.142.

⁴⁶ J. CARBONNIER, op. cit, n^o 21.

⁴⁷ Ibid.

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In France, in a particular case, the lesion was applied to changed circumstances occurred during the execution of the contract. The hypothesis was the following⁴⁸: A unilateral promise to sell was signed under which the owner reserved to the other party the right to repurchase the building at a fixed price either for an extended period or for a date fixed in future. The time between the conclusion of the agreement to sell and the removal of the promise might take several years. The price surge that accompanied the First World War had the effect of making the fixed price in the promise to sell derisory in relation to the value of the building upon the removal of the promise.

The court have ordered the rescission of the sale resulting from the removal of the promise on the basis of articles 1674 and following⁴⁹ of the French Civil Code relating to the lesion of more than seven twelfth in immoveable matters. In fact, the lesion, according to the case, is appreciated at the time the sale is perfect, that is to say upon acceptance.

2.5. Acts of government

The Acts of government cannot be invoked when the government intervenes by general measures that affect all people in the same situation as the contractor of the administration⁵⁰.

However, general measures, which very often were not enacted directly by the contracting authority, are subject to full compensation for the damage they cause to the contracting party of the administration, if, these laws and regulations affect a term which can be considered to be a condition in the conclusion of the contract, a matter that a consideration decided the contractor has concluded the contract when it appears and the contractor has agreed to

⁴⁸ Cass. Civ. 14 novembre 1921, D. 1921, p.34.

⁴⁹ Art 1674: Si le vendeur a été lésé de plus de sept douzièmes dans le prix d'un immeuble, il a le droit de demander la rescision de la vente, quand même il aurait expressément renoncé dans le contrat à la faculté de demander cette rescision, et qu'il aurait déclaré donner la plus-value.

⁵⁰ A. BASOMINGERA, Cours de droit administratif, Notes de cours, Butare, UNR, 2009, p. 108

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be bound in consideration of a certain state of affairs existing at the time of the contract⁵¹.

If there is a law, order, instruction or decision issued by competent authority, that changes the provisions of the contract, the procuring entity and the successful bidder shall agree on the decisions to be taken with the view to:

1. «Modify the provisions of the contract so that the contract execution continues;

2. Determine the compensation that may be granted to the disadvantaged party;

3. Cancelling the contract⁵²».

2.6. Abuse of law

The abuse of law has been in rare applications for hypothesis characterized by a change in circumstances. In France, a person who rented an apartment for a year was transferred by his employer two months after the conclusion of the contract. She left area and stopped paying rent. The Court of Appeal granted payment of the remaining ten months of rent to the lessor. The Supreme Court quashed this decision criticizing the Court of Appeal that it didn't look the legitimacy of the motives that animated the lessor and in particular not checking if he was not animated by the malicious intent to harm the other contracting party⁵³. It was impossible for the lessee, decided the court, to predict that he will be transferred from that area at the time of conclusion of the contract.

⁵¹ Arrêt Tanti du conseil d'Etat du 28 novembre 1924 (R.D.P, 1925, PP. 76 ET SS.).

⁵² Art 107 of the Law n° 12/2007 of 27/03/2007 on public procurement , O.G n° 8 of 15 April 2007

⁵³ Cass. Civ. 22 février 1968, D. 1968, p. 607

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2.7. The cause

The cause is generally defined as the social-economic function of the contract and that the motives are not considered in determining the cause. The cause in its classic definition is a concept devoid of meaning, the concept of cause to be effective, should allow including all interests in the economy of the contract, thus taking into account the circumstances that affect contractual economy⁵⁴.

The existence of the cause must be determined during the formation of the contract. This principle, therefore forbids courts to restore the economic balance of contract broken by the unexpected events during its execution⁵⁵.

SECTION 3. SPECIFIC HYPOTHESIS ON CONTRACTUAL UNPREDICTABILITY

3.1. Disappearance of the function of the contract

The content of a contract is not only limited to the express terms of the agreement. It must be supplemented by the implied terms deriving from the law, custom, and nature of the contract or its context⁵⁶ if an unpredictable event comes to alter the contractual economy after the conclusion of the convention.

When the contract loses all interests for parties, it is necessary to declare the cancellation of the agreement on grounds of force majeure.

Where an agreement which has its cause in another contract was signed or is accessory to another, the disappearance of the contract establishing the cause of the agreement leads to the dissolution of the agreement⁵⁷.

⁵⁴ J. PINNEAU, op. cit, p.85.

⁵⁵ Ibid.

⁵⁶ O.T. ROBERTS, Implied Terms in Contract, N.L.J., London, 1978, p. 280 see also art 34 CCB III

⁵⁷ R. SAVATIER, Théorie des obligations, vision juridique et économique, 3^eme éd., Paris, Dalloz, 1969, p. 77.

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3.1.1. Occurrence of a temporary obstacle: effect on the contract

In case of force majeure, a temporary obstacle can allow the debtor to

terminate the contract, if it appears, upon the occurrence of the obstacle, that it shall take effect for a period as the contract will become irrelevant if the obstacle is lifted.

French law seems to respond positively. Thus, a charter contract may be disturbed by the requisition of the ship. If the probable duration of the requisition is likely to make lost all utility of the contract, the parties may, upon requisition, terminate the contract⁵⁸.

According to J. Treillard, the cause will guide the determination of the effects of force majeure, we will respect the will of the parties as reflected in the convention and their behavior, the nature of benefits and the possibility to ensure the execution of the contract in the circumstances of each case will be considered⁵⁹.

3.2. Imbalance of benefits

We seek to determine whether the solution adopted depends on the type of circumstances (depreciation, war, strike) and their influence on the contract (reduced value of the counter-benefit).

⁵⁸ J.F. ARTZ, La suspension du contrat à exécution successive, Paris, Dalloz, 1979, pp. 95 .

⁵⁹ J.TREILLARD, La suspension des contrats: dans la tendance à la stabilité du rapport contractuel, Paris, Dalloz, 1982, p.68.

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3.2.1. Currency depreciation

According to the nominal principle, the amount of money due is the numerical sum stated in the contract. The same rule applies when the value of money has been officially adapted as a devaluation or revaluation⁶⁰.

The rejection of judicial intervention is justified by the following reasons:

- Changing the value of money is part of economic policy and raises issues of opportunities that are not within the jurisdiction of the judge⁶¹.

- The currency depreciation is a general phenomenon, and the judge intervenes in specific and precise hypothesis, assigning to the judge the determination of effects of the depreciation would lead to insecurity and probably unequal treatment between individuals⁶².

The French Supreme Court has refused to adapt conventional amounts due in case of the decrease in the real value of the contract⁶³.

Only the nominal principle also explains the rejection of the adaptation of amounts due to the depreciation of the foreign currency.

It may be recalled the devaluation of the pound during the crisis of the thirties. The pound was chosen as the reference currency of loans in guarantee of exchange⁶⁴. The French Conseil d'Etat refused any adaptation following the devaluation of the amount due, in principal or interest⁶⁵.

⁶⁰ H.L.J MAZEAUD et F. CHABAS, Les obligations. Théorie générale, T. II, 9^eme éd., Paris, Montchretien, 1998, p. 231.

⁶¹ H. CAPITANT, L'influence des variations monétaires en matière de contrats administratifs : rapports français, Paris, Travaux d'association Henri Capitant, 1955, p. 207.

⁶² Ibid.

⁶³ Cass. Civ. I, 20 mars 1956 JCP 1956

⁶⁴ H. CAPITANT, op. cit, p.208.

⁶⁵ Ibid.

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3.2.2. Increase in the cost production

We will distinguish between the slow process of changed contractual relations and influence of a sudden process of changed contractual relations due to an exceptional event.

«The decision of the German Supreme Court provides an interesting illustration of this problem. A company exploiting a mine by its activities has dried up a source that distributed water to its owner. The company then agreed to indemnify the owner and, by contract signed in 1901, undertook to provide the water he would need by paying a small fee equivalent to the source.

Three-quarters of a century later, the beneficiary of the mining company asked the court to rule that the current owner was required to pay the price that was current rates for the delivery of the same amount of water.

The Court of Appeal of Berlin had partially granted the application. It took into account the following changed circumstances:

- The new requirement for the quality of water, - The increase in consumption,

- The increase in production cost.

The Supreme Court reformed the decision. It pointed out that the increase in cost production of potable water since 1901 and the deep mismatch between current costs and the fixed price at the time cannot be considered⁶⁶».

If within a lump sum contract the entrepreneur is facing significant difficulties affecting the matter to be treated, he is entitled to claim compensation on the basis of the theory of unpredictable subjections⁶⁷. Difficulties of both material

⁶⁶ B.G.H 4Octobre 1978, M.D.R, 1979, p. 490

⁶⁷ A. BASOMINGERA, op. cit, p. 197

and economic on the one hand, or occurred after the conclusion of the contract on the other hand, can result in the application of this theory.

In administrative law, this factor is likely to result in the application of the theory of unpredictability or unpredictable subjections. In civil law however, it does not allow, in principle, any adaptation of the contract⁶⁸.

22

⁶⁸ Ibid.

23

CHAPTER II. CASE LAW BASED ANALYSIS OF CONTRACTUAL UNPREDICTABILITY UNDER RWANDAN

The concept of contractual unpredictability is recognized in a given legal system when the jurisprudence applies an institution whose essential purpose is to allow the modification or termination of the contract when change of circumstances is transforming the contractual obligation assumed⁶⁹.

The recognition of the contractual unpredictability is likely to offer a fair solution in situations where the maintenance of the performance of the original contract is contrary to the principles of justice.

Obviously the essential element in either case is the readjustment of the risk of unforeseen events so that no one of the parties becomes the benefactor and another the victim of an occurrence not allowed for in the contractual balance of interest⁷⁰.

SECTION 1. APPROACH OF THE CONCEPT OF CONTRACTUAL UNPREDICTABILITY IN GENERAL

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.

1.1. Recognition of the concept

The considerations raised in the first chapter lead us to propose the introduction into our legal system the concept of contractual unpredictability. This would allow the readjustment or extinction of one or more contractual

⁶⁹ R. GOTTSCHALK, Impossibility of Performance in Contract, London, Cavendish publishing, 1945, p. 126

⁷⁰ J.H. DALHUISEN, Changed Circumstances and the Role of the Judiciary, Exempel dwingt, Kischbundel, 1972, p. 27

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obligations when arise, after the conclusion of the contract, the circumstances having the following characteristics: being not attributable to that party, and have the effect of a radical change of the contractual obligation assumed⁷¹.

Thus, the Court of First Instance of Kibungo granted in 1992 compensation to the French company CORAS that built the road Rusumo-Kayonza when it met during the execution of the contract, a rock in the zone of Kibaya that had not been anticipated in the formation of the contract⁷².

We will consider in the following paragraphs the legal basis, the applicability and effect of the concept.

1.2. Legal Basis: good faith

If good faith requires not to mislead the other party, it also requires not be enriched by his divests, if unforeseen circumstances make the contract other than what had been envisaged by the parties⁷³.

Article 33 paragraph 3 CCB III states that the agreements must be performed in good faith⁷⁴. To understand the meaning of the third paragraph of this article we must necessarily closer it to those which precede it. However, the article states first that agreements legally formed become a law for those who have entered into. Then it adds that they can be revoked by mutual consent or for causes authorized by the law, which means that a party cannot revoke an agreement by his own willingness.

⁷¹ Ibid.

⁷² RC 867/92 of 28^th September 1992 of First Instance court of Kibungo, unpublished

⁷³ M. PLANIOL et G. RIPERT, Traité pratique de droit civil français, T.VI, Paris, L.G.D.J, 1930, p. 554

⁷⁴ Civil code book III, op cit.

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Or no text of the code allows one party to seek termination on the grounds that subsequent events make the performance of his obligation more difficult and heavier than how he had been expected.

Thus, in the case between Mr. K. T and Mr. R. R the Court of Appeal of Ruhengeri refused the modification of the contract⁷⁵ on the basis of Article 33 of the Civil Code Book III, which prohibits any kind of modification to the conventions of the parties. Indeed K.T. committed to transport hardware materials from Mombasa to Kigali to Mr. R.R for a period of 18 months. The liberation war between the RPF and the Armed Forces of Rwanda (ex-FAR) in 1992 caused insecurity which prevented the carrier to pass the normal route Mombasa-Kampala-Kigali, the route was modified in Mombasa, Dar-es-salaam-Kigali, which increases the cost of transport for the carrier.

The Court of Appeal of Kigali reformed this decision by confirming that the change in the route for the carrier is an event that could not have been foreseen at the conclusion of the contract and good faith set out in Article 33 paragraph 3 requires parties to share the risk of unforeseen change of circumstances⁷⁶.

Good faith allows introducing and systematizing the moral rule in the law, it aims to ensure contractual justice where the rules governing the convention are too rigid and where their effects create an obvious injustice.

1.3. The conditions of application

The application of contractual unpredictability depends on the type of contract whose execution was blocked by the occurrence of an unpredictable event at its conclusion and the circumstances that have disrupted its economy.

⁷⁵ R.C.A 7608/Ruh of 27 April 1992 of the Appeal court of Ruhengeri, unpublished

⁷⁶ RCA 8769/kig of 29 July 1993 of the Appeal court of Kigali, unpublished

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1.3.1. Types of legal relation

In general, the theory based on the analysis of the contract shall apply to all contracts, whether unilateral or bilateral. In addition, the new event may exceptionally occur after the contract has been executed⁷⁷.

Theories based on the unpredictability apprehend contracts with the execution of, at least one of the benefits are deferred. The French civil law writers state that the theory applies to contracts of successive or continuous performance. The disturbing event must, in these theories, occur before the contract is fully executed⁷⁸.

Are the random contracts covered by the theory of unpredictability? Rwandan jurisprudence does not exclude the application of the concept to random contracts. Thus, life insurance premiums stipulated in 1991 between SONARWA and Mr. N. A. have been adjusted due to currency depreciation since 1991 and 2001 by the Court of First Instance of Gisenyi. Indeed, the court has considered that the hazard was not about the element of the contract⁷⁹.

In our opinion, for random contracts, occurrence of the hazard can certainly cause an imbalance in the contractual benefits. If the change in circumstances does not concern contractual hazard, I don't think it is logical to deprive the aggrieved party the benefit of contractual unpredictability. The problem therefore arises not in terms of nature of the contract, but in terms of contractual risk.

⁷⁷ R. DAVID, L'imprévision dans les droits européens, Paris, Etudes Jauffret, 1974, p.220

⁷⁸ R. DAVID, op. cit, p. 220

⁷⁹ RC 3720/R10/2001 of 12^th October 2001 of the First Instance Court of Gisenyi, unpublished

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1.3.2. The circumstances

Circumstances, object of the unpredictability, must be objective and independent of the will of the parties. The application of contractual unpredictability must be rejected after having ascertained that the course of events depended on the will of either party⁸⁰.

1.3.2.1. Nature of the circumstances

In theory directed towards the intensity of the change of circumstances, unpredictability is often the result of a contractual economic risk (currency depreciation, price increases). Indeed, nothing prevents the application of this theory at the time of the occurrence of an event of a different nature such as war, natural disaster, etc⁸¹. In theory-based on analysis of the contract, the nature of the new circumstances is irrelevant⁸².

In our opinion, there is no reason to limit the application of unpredictability to a type of circumstances. What matters is the impact of circumstances on the contract and not the fact that it is a war or an increase in oil prices.

Some theories such as unexpected subjections in administrative law are applicable to present circumstances as well as in circumstances subsequent to the conclusion of the contract. In French and Belgian law, the concepts of error and cause allow to apprehend, reasonably satisfactorily, problems relating to mismatches between the present circumstances in the contract and the contractual economy⁸³.

⁸⁰ G.M. SEN, Doctrine of Frustration in the Law of Contract, Special Issue, London, J. Ind. L. Inst., 1972, p.417

⁸¹ P.S. ATIYAH, An introduction to the law of contract, Oxford, Oxford University Press, 1981, p. 217

⁸² Ibid.

⁸³ M. WALINE, op. cit, p. 619

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It seems clearer to guide the application of contractual unpredictability to change of circumstances after the conclusion of the contract.

1.3.2.2. Characteristics of circumstances and their effects

The occurrence of disturbing events must be characterized by non-imputability of party invoking it and unpredictability of these events.

a) Non-imputability

The contractual unpredictability certainly must not result from the mere fault of the aggrieved party. P. Voirin has also written that the condition of non-imputability was unnecessary, if the change in circumstances is attributable to one party, the problem is, according to the author, analyzed in terms of breach of contract and not at the equivalence of benefits⁸⁴.

Thus, two farmers H.E and G. C had rented a farm land to a single landowner R. G in the municipality of Satinsyi in the prefecture of Gisenyi. They committed themselves to him jointly and severally. Subsequently, one of them (H.E) refused to continue his activities. Could the other party invoke contractual unpredictability? No, said the Court of First Instance of Gisenyi, because it is a voluntary act on behalf of a contractor that his partner must respond under the character of joint and several obligations⁸⁵.

Is it then that the change in circumstances be totally stranger to that party? We must distinguish three distinct problems:

- The character of the new circumstances; - The determination of fault, if any;

⁸⁴ P. VOIRIN, op cit, p.187

⁸⁵ RC 2745/R7/2000 of 17^th October 2000 of the First Instance Court of Gisenyi, unpublished

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- The causal link between the fault and the disappearance of the contractual basis.

The new circumstances should be of a supra individual⁸⁶. Thus, death or illness of the debtor is not in principle such a circumstance, as well as the financial difficulties faced by the debtor. This principle may be subject to exceptions in the case of certain contracts such as dietary contracts. Thus, in these contracts, the financial resources of the parties are directly related to the purpose of contract⁸⁷.

The imputability of contractual unpredictability also requires the violation of specific contractual obligations or general obligation of diligence. The new circumstances can be caused by the act of the debtor or jointly by external factors⁸⁸.

b) Being unpredictable

The unpredictability is appreciated at the time of conclusion of the contract. It should not be absolute, it is sufficient that the occurrence of an event be improbable. It is evaluated on the basis of an appreciation of different circumstances (profession and intellectuality of the debtor, the degree of change in circumstances in a period shorter or longer preceding conclusion of the contract, indices permitting at conclusion of the contract to foresee the change in circumstances). The condition is also verified when a predictable event leads to unpredictable consequences⁸⁹.

The unpredictability is appreciated in a double angle.

⁸⁶ H. DESCHENAUX, La révision des contrats par le juge, RDS, Vol. 61, Paris, Editions Cujas, 1942, p. 515

⁸⁷ Ibid.

⁸⁸ M. A. FLAMME, op. cit, p.203

⁸⁹ M. WALINE, op cit, p.623

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Firstly, the change in circumstances must exceed the normal measure of randomness considered in its past form. Changes in circumstances prior to conclusion of the contract thus determine if a hazard should or should not be considered as normal⁹⁰. Moreover, the threshold of abnormality of the hazard will be as higher as the duration of the contract is extended⁹¹.

Secondly, at the conclusion of the contract, there was no reason to believe that in the future, a sudden change would alter the contractual risks that had been assumed⁹².

1.3 Effect of circumstances on the contract: risk analysis

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 it⁹³.

1.3.1 Contractual economy

This point therefore covers the determination of the essential elements of the contract which, in execution, come to disappear or suffer significant changes.

We find the notion of contractual economy in the definition of unpredictability in administrative law. It represents the balance and arrangement of contractual services. Its determination arises from an analysis of the nature (public service) and sometimes the terms of the agreement⁹⁴.

⁹⁰ P. FOUCHARD, «L'adaptation des contrats à la conjoncture économique» Revue de l'arbitrage, Paris, Dalloz, 1978, p. 65

⁹¹ Ibid.

⁹² Id. p. 68

⁹³ P. FOUCHARD, op. cit, p. 70

⁹⁴ X. DIEUX et autres, Les obligations contractuelles, Paris, Ed. du Jeune Barreau, 1984, p.156

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It is not necessary that a circumstance has been integrated into the motivation of all contracting parties. It is sufficient that a state of things form the common basis of evaluation of terms of contract. This is not a psychological evaluation, but logic, implicit in the reality existing at the conclusion of the contract with the interests of the subject.

The upheaval of the economy of contract involves a radical change of the contractual obligation and exceeding the risk assumed⁹⁵.

When the disruption of the economy of the contract is established, the Contractor may obtain compensation. In the event that the stabilization of economic conditions occurs at a level that contract clauses definitely prove to be inadequate, the courts consider that it is for contractors to carry out their revision of court. Failing such agreement on that point, the courts reserve the right to order the termination of the contract⁹⁶.

Sometimes the scope of the occurrence of a disruptive event may appear to be limited. The judge will refuse to apply the rules of risk allocation established in case of contractual unpredictability whenever the change in circumstances does not alter profoundly the contractual obligation assumed⁹⁷.

3.3.2 Risks

By contracting, the parties shall in particular ensure the legal enforcement of obligations undertaken by their partners, their desire for security would be disappointed and therefore, the contract would lose its value if any change of circumstances allowed a reconsideration of obligations freely assumed⁹⁸.

⁹⁵ Id. 157

⁹⁶ Id. P. 158

⁹⁷ R. DEKKERS, Précis de droit civil. Les obligations, T.II, Bruxelles, Bruylant, 1955, p. 501

⁹⁸ P. VOIRIN, op cit, p.111

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However, contractual risks constitute precisely burdens or consequences resulting mainly from changes in circumstances subsequent to conclusion of the contract.

Therefore, the first rule of risk allocation can be stated as follows: the change in circumstances affecting the contractual benefits does not change the conventions⁹⁹.

Thus, the creditor of an amount of money will withstand the effects of currency depreciation, the tenant who is transferred by his employer in a distant town and who is unable to enjoy the leased premises, shall continue to pay the rent, increase in production costs is payable by the contractor.

These rules must be refined by the following factors:

- Contractual clauses allowing the parties to derogate from the general rule of risk allocation. Thus, contractors may sell land on the precedent condition of granting the building permits;

- The judge will then have recourse to legal rules. These are often residual; - Risks can be allocated from the interpretation of contracts. The

qualification allows to discover the nature of the contract and therefore

the distribution of the risk that govern it¹⁰⁰.

1.3.3 Unenforceability of the obligations under the good faith

Good faith contained in the contractual relationship requires to not enrich on the divests of the contractor when an event has disrupted the economy of the contract. This is also the principle that in case of impossibility no person shall be liable implicitly covered by Article 46 of our Civil Code which provides that it should be no damages when, as a result of force majeure or unforeseeable

⁹⁹ Ibid.

100 U.K Law Reform Act, Frustrated contracts, of 1943, ch. IV, n^o 1.4.

circumstances, the debtor was unable to give or do what he had to, or have done what was forbidden.

1.4. The parties may waive in the contract the benefit of unpredictability?

Several administrative law authors like A. De Laubadère and M. Waline write that the theory of unpredictability is of public order; they refer to the basis of the theory which requires the payment of compensation in case of increased expenses of the original contract. The essence of the contractual unpredictability prevents contractual waiver beforehand.

SECTION 2. OPPORTUNITY OF A CHANGE UNDER RWANDAN LAW

When a solution has been adopted in a legal system similar to ours, and that this solution is not subject to any dispute, it is likely to be introduced into our legal system.

We will examine the issue successively in terms of equity and social norms, economic efficiency and legal security.

2.1 Equity and social norms

The contractual unpredictability acts as ultima ratio i.e. last resort, when we cannot permit the creditor to demand the execution of a contract which has become, having regard to circumstances beyond the control of the debtor, unbearable for the latter'⁰'.

33

101 PLANIOL et RIPERT, op cit, p.552

34

It is the equity which in 1993 pushed the Court of Appeal of Kigali to allow the revision of the contract of carriage between Mr. K. T and Mr. R. R shocked by the liberation war between the RPF and ex-FAR¹⁰².

Even the adversaries of unpredictability recognize that this theory is to make more equitable contractual legal relations.

The exclusion of any possibility of revision of alimony granted to the spouse after divorce by mutual consent by the Primary Court of Kicukiro¹⁰³ seems shocking in terms of equity. Is it, for example, logic that the creditor of alimony who loses his job should continue to pay the same amount to his former spouse, unemployed at the conclusion of the contract, who thereafter found a job? The judge should have considered the circumstances that followed the conclusion of the contract and then revise the contract.

Comparative law, along the lines with the Belgian and French law shows that applying the concept of contractual unpredictability would avoid the inconsistency and injustice.

2.2. Contractual economy

A state of circumstances that formed or should form the basis for evaluation of contract terms is integrated into the contractual economy.

It is determined on the basis of the following elements¹⁰⁴:

- Agreements between the parties and the procedures for concluding the contract;

- The contract itself. Its content may consider a circumstance, the common intentions of the parties. Price is an important element of appreciation. The nature of the contract is also to be considered;

102 RCA 8769/kig of 29^th July 1993 op cit

103 RC 0039/05/TD/Kro of 30^th september 2005 op cit

104 R. DEKKERS, op. cit, p. 512.

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- Finally, the mode of execution of contract will, based on the conduct of the parties after the conclusion of the contract, better define the objectives that the parties had set.

Too absolute application of the principle of convention-law does not seem appropriate¹⁰⁵. Deny the adaptation of the contract in exceptional circumstances, is, ultimately, refuse to adapt to a new environment¹⁰⁶.

A contract totally unbalanced subsequently new circumstances is no longer economically useful.

The fear of an unfortunate intervention of the judge in the contract may be appeased by the inclusion of appropriate contractual clauses. An alleged incompetence of a judge of the judicial order in the field of reviewing contracts cannot be invoked to reject the concept of contractual unpredictability¹⁰⁷.

Thus, the meeting of a rock during the construction of the road Rusumo-Kayonza by the CORAS Company pushed the Court of First Instance of Kibungo to grant an additional cost to the contractor who was committed to build a road¹⁰⁸. This solution was certainly economically justified and allowed to preserve the viability of the market and hence the company.

2.3 The legal security

In a legal system, a concept must be clear and specific to be put into applications. If, in order to obtain the solution that he considers appropriate, the judge must apply a concept extensively or wrongly, the law has no legal

105 J.L BAUDOIUIN, «Justice et équilibre: la nouvelle moralité contractuelle du droit québécois» in Etudes offertes à J. Ghestin, Paris, L.G.D.J, p.97.

106 D. PHILIPPE, «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.127

107 M.J KAMI. «Planning in times of unpredictability», in Columbia Journal of World business, Summer, 1976, p.26.

108 RC 867/92 of 28^th September 1992, op. cit.

security desired¹⁰⁹. If an institution organizing the unpredictability in contract is not regulated in a precise manner, judges will tend to apply this concept in the hypothesis that does not match with it.

In our opinion, the parties' expectations are met, the security of business will be better guaranteed, if the contract is adapted to new circumstances so that its performance once again becomes consistent with the economy of the convention.

36

109 J.L BAUDOIUIN, op. cit, p.110.

37

CHAPTER III. RESTORATION OF THE BALANCE OF CONTRACT

This last chapter elaborates on the role of good faith in the restoration of balance in the contracts (Section 1), and then it covers others duties of parties in the contract (Section 2) and it ends by the intervention of the judge in the contractual relations (Section 3).

SECTION 1. GOOD FAITH IN CONTRACTUAL RELATIONS 1.1. The concept of good faith

The concept of good faith is the belief of a person to be in a situation in accordance with law and conscience to act without harming the rights of others, without fraud.¹¹⁰

Be of good faith, is to behave honestly. Be of good faith, it is also to have a loyal behavior. While the honesty is intrinsically linked with the intention of its author, loyalty can be heard for the actions, norms, standards required in a given situation. Is loyal and adequate to good faith, a legal situation which complies with moral laws¹¹¹.

Good faith is a general presumption that the parties to a contract will deal with each other honestly, fairly, and in good faith, so as to not destroy the right of the other party or parties to receive the benefits of the contract. It is implied in every contract in order to reinforce the promises of the contract¹¹².

110 X. La notion de bonne foi dans les contrats, available at http://lexinter.net/JF/bonnefoi1.htm accessed on 3rd October 2011

111 X. La bonne foi et la loyalité, available at

http://www.usherbrooke.ca/droit/fileadmin/sites/droit/documents/RDUS/volume 26/26-2-lefebvre.pdf accessed on 3rd October 2011

112 S.J. BURTON, Principles of Contract Law, St. Paul, Minn,: West Group, 2001, p. 444

38

The problem of unpredictability arises when a contractor is obliged to perform an obligation, while the occurrence of new and unforeseen circumstances at the time of conclusion of the contract makes this performance more difficult or expensive¹¹³. Good faith imposes that a party cannot fulfil its obligation when an event has substantially changed the conditions under which the contract originated¹¹⁴.

The solutions adopted by courts show some creativity and flexibility. Indeed, adaptation to unforeseen circumstances of the contract is accepted in different sentences on the basis of good faith¹¹⁵. Thus, the theory of unpredictability, which comes from the principle that pacta sunt servanda, is limited by the superior principle of good faith¹¹⁶. It is manifestly contrary to good faith and therefore abusive to maintain obligations to the debtor under the contract if the circumstances existing at its conclusion have changed to a point as the economy of this contract is upset¹¹⁷.

1.2. Good faith in the contractual process

Good faith is widely understood as loyalty, solidarity, proportionality and concern for balance of contract imposing itself in all phases of the life of the contract: negotiation, information, conclusion, execution, interpretation, modification, renegotiation, breach, rupture and consequences¹¹⁸.

The parties are required to comply with the requirements of good faith in international trade. They cannot limit this obligation or limit its scope and each

113 Ibid.

114 Ibid.

115 For example in the case RC 3720/R10/2001 of 12^th October 2001, op. cit.

116 E. AUDEMET, Théorie générale des obligations, Paris, Sirey, 1965, p. 451.

117 Id.

118 S.J. BURTON, op. cit., p. 450.

39

party must act in accordance with the requirements of good faith. The parties may not exclude nor limit this duty¹¹⁹.

Good faith is a concept whose importance continues to grow in law of contract. Some¹²⁰ want to make it a general principle that all contracts would be subject to, others see it as a dangerous instrument placed within the power of judges. Behind this conflict lie opposing conceptions of law of contract which have been accepted or rejected according to the legal systems.

In any case, each contractor shall inform its negotiating partner on each item which may affect the progress of their talks. This determination efforts the exteriorization of good faith in the contractual process¹²¹.

At the conclusion of the contract, article 8 CCB III provides for four essential conditions for the agreement to be valid. These are: the consent of the party who obliges, the capacity to contract, a certain object which forms the subject of commitment and a lawful cause of obligation.¹²²

Consent must be clear and freely given i.e. it must be genuine. Consent is the manifestation of the will of each of the contractors. Under Article 9 of the Civil Code Book III, there is no valid consent if the consent was given by mistake or was extorted by violence or fraud. When one party has contracted under these conditions, the law recognizes the possibility to cancel the contract in court. Indeed, defects of consent constitute a legitimate reason to cancel the contract.

The object of the contract is the legal transaction that the parties wish to achieve. The object of the obligation is the thing promised by the debtor, the content of his commitment. The object must be fixed or determinable. Each object must be identified and this will be by its nature. If it is a specific thing, it

119 Article 1 of European principles of law of contracts. Revised and completed version of 1998

120 DEMOGUE René and B.S.MARKESINIS

121 E. KALIMUNDA, La bonne foi en matière contractuelle, mémoire, Butare, UNR, Faculté de Droit, 1991, p.21.

122 Art 8 of CCB III op. cit.

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will be defined and individualized. Example: state the house for sale. If the object is a thing of a kind, the determination is made in quality and in quantity¹²³. If the object cannot be determined it must be ascertainable, is to say, defining the criteria by which the object will be determined¹²⁴. In the sales contract, the price must be fixed or determinable at the time of contract formation¹²⁵.

The efficient cause is the event preceding the contract in time. It will be the same for each type of contract. In the bilateral contract it is the exchange of benefits while in the unilateral contract it is for libertarian intention. According to the modern doctrine, the cause is the motive that pushed an individual to contract, it is called final cause¹²⁶.

The cause must be real under penalty of nullity of the contract. The false cause is an error, a contractor agrees thinking that there is a consideration when it is not¹²⁷. We talk about dissimulated cause when parties try to hide the nature of their relationship in an apparent act and conclude in a secret act said counter letter another commitment, it has two causes for both contracts, but only the second involves the determinant cause of contract (example: to cover up a debt under a loan agreement)¹²⁸.

Concerning good faith in case of capacity, it is the ability by law to be bound by a legal act¹²⁹. Under Article 23 of the CCB III, any person can contract, if he is not declared incapable by law. The law protects the incapable persons and their contractors that is in order to protect third parties of good faith and not to cancel the proceedings concluded.

123 F. ZIGIRINSHUTI, Specific private contracts, Butare, NUR, 2006, p. 14.

124 Ibid.

125 Id., p. 15

126 J. PINNEAU, op cit, p. 89.

127 Article 30 CCB III

128 J. PINNEAU, op cit, p. 90.

129 J.L. BAUDOUIN, Justice et équilibre: la nouvelle moralité contractuelle du droit civil québécois, Paris, L.G.D.J., 2001.159.

41

Good faith is required in contractual relations of the purpose for the proper functioning of contractual life. If the contracting parties respect each other the duty of good faith, each party will have what he expects from the contract and the third parties will not be harmed by him.

1. 3. Sanction of violation of good faith

Good faith resulting from moral considerations is a general and fundamental law of contracts. The lack of good faith is punishable by either the nullity or the rescission of the contract. The nullity is defined as a legal sanction that strikes an irregular legal act, according to the required elements of validity¹³⁰. The nullity is intended to deprive the legal act of the legal effects it would have to produce. So the contract is deemed never to have existed.

So, in case of breach of duty of good faith, a legal act concluded becomes void, so there is annihilation ab initio. Every nullity must be established by the judge¹³¹. The rule that agreements must be performed in good faith allows the judge to sanction the use of unfair contractual prerogative; it does not allow him to undermine the substance of legal rights and obligations between the parties.

As for the resolution of the contract, it is a judicial dissolution of the contract for fault in the performance of the contract. Under Article 82 CCBIII the resolutory condition is always heard in the bilateral contracts, in case one or two parties do not meet a commitment¹³².

The breach of good faith is usually punished by the civil liability of the other party of bad faith. It can certainly find another penalty in the neutralization of

130 A.M. NGAGI, op cit, p.76.

131 A.M. NGAGI, op cit, p.76.

132 Rwandan civil code book III, op cit.

42

the stipulation and on this point there is in France, a classic case law for resolutive clause¹³³.

It should be noted that the parties to the contract must say the truth and nothing else but the truth especially about the purpose and performance of the contract, a fortiori the breach of good faith would lead to the resolution of it.

SECTION 2. OTHER DUTIES OF CONTRACTORS 2.1. The duty of loyalty and cooperation

Loyalty prohibits a party to the contract to mislead their partners about the extent of their obligations¹³⁴. It also prohibits any behavior that would prevent the other party to withdraw the normal benefit of contract. Loyal information of the other party implies first that one refrain from any kind to deceive other, it is also assumed as in the pre-contractual phase, the duty of information¹³⁵.

Concerning the obligation of cooperation, the harmonious execution of the contract involves some collaboration between parties. The duty to cooperate which permits relations between parties to a contract requires that each one inform the other of the content and circumstances that go into the perfect performance of the Contract¹³⁶.

According to H. De PAGE, solidarity laid down by contractual relationships, in view of social utility; prohibits each party to lose interest in the other. Both must loyally and mutually provide all necessary support to successful conduct of the contract¹³⁷.

133 Cass. 1^ere civ. 16 fevrier 1999, Bull., n^o 52

134 E. KALIMUNDA, op cit, p.39, unpublished

135 Ibid.

136 X. Duty of cooperation and loyalty, http://www.erudit.org/revue/cd/1997/v38/n2/043443ar.pdf accessed on 4th October 2011

137 De PAGE, Traite élémentaire de Droit civil Belge, principe-doctrine-jurisprudence, Les obligations, T.2, I^ère partie, 3e éd., Bruxelles, 1964, no 466

43

The goal of the duty of cooperation is to facilitate the work of the other party. It is mainly in terms of the contract that this obligation takes its full extent. Indeed, during the execution of contract, good faith gives rise to the obligation of cooperation¹³⁸.

2. 2. The duty of information

The duty to inform is grounded in moral considerations that form the set of principles constituting the rules of conduct that everyone must respect. Thus, the duty to inform would be the natural result of the application of principles of good faith and contractual morality¹³⁹.

In a society of independence and responsibility, it seems natural to ask everyone to take its interests without waiting for the rescue of others¹⁴⁰. Hence the maxim debet esse curious emptor i.e. the buyer should be curious¹⁴¹ meaning that every contractor must be vigilant while contracting.

But at the same time, loyalty which should govern the formation of contractual relations seems to impose that when a person has information which may influence the choice of her partner, he communicates it spontaneously¹⁴².

It is the duty of everyone to inform himself. But from the mid-twentieth century, a school of thought more responsive to the weak, more concerned with reducing inequalities, has changed the balance in favor of one whose real capacity to inform appears to be limited. The duty to inform himself then leaves the place to the duty to inform.

138 Y. DERAINS, «Les tendances de la jurisprudence arbitrale internationale», Journal du droit international (1993) 120 829, 849.

139 P. LE TOURNEAU, « De l'allégement de l'obligation de renseignement et de conseil », (1987) 2 Recueil Dalloz

Sirey, Chronique XIX, p. 101, 104.

140 F. TERRE, Ph. SIMLER et V. LEQUESTE, Droit civil, Les obligations, 8^e éd., Dalloz, Paris, 2002, p. 238

141 ROLAND et BOYER, Adages du droit français, 4e éd., Paris, Cujas, fl^o 110, p.199

142 Ibid.

44

Our interest is rather on the duty to inform, that could be described as specific accessory obligation or implied, resulting from the application of either a law or general principles of law. One can see that in our civil law relating to contracts, the obligation to inform the other party is part of the obligation to execute the contract in good faith¹⁴³.

The duty to inform exists when the debtor knows or should know the information that concerns a relevant fact so decisive for the other party, especially when it has full confidence in the knowledge of the debtor¹⁴⁴.

The obligation to inform can be linked to the requirement of free and clear consent. It is also part of good faith in contract formation.

The obligation to inform is a pre-contractual obligation that participates in the particular development of a notion of professional and the burden for a professional to inform the profane, whether professional from another specialty or unprofessional¹⁴⁵.

At the end of analysis, we see how much is fluctuant the duty to inform for the debtor of it. This obligation, as the obligation to cooperate, is one of concepts introduced in the moral law. It comes somehow moralizing contractual relationships to the parties by imposing general norms of behavior.

SECTION 3. JUDGE TO RESTORE DE FACTO EQUALITY

The judicial intervention in the contract has been based on concepts already existing in our civil code book III and administrative law: good faith, fairness, good morals and public order, considered as instruments of social constraints.

¹⁴³Article 33 para 3 of civil code book III states that agreements must be executed in good faith

144 Ph. MALAURIE et L. AYNÈS, Cours de droit civil: les contrats spéciaux, civils et commerciaux, 7e éd., Paris, Cujas, 1993-1994, p. 410.

145 Ibid.

45

These concepts have grown dramatically. Thus, good faith is now considered as a substantial principle requiring the parties to behave honestly in contractual relations. Good faith can be found in the life of the contract (formation, performance and termination).

3.2. The intervention of the judge in contractual relations

The contract is conceived as the product of the meeting of two wills free and equal. As a result, judicial intervention in the relations between the contractors should be limited. The intervention of the judge in the contract had to be adapted; the contract did not escape the broader movement of proceduralisation of law. Today, the judge is no longer strange to the contract. The finding of de facto inequality in some agreements has led to intervene more often to protect the weak party: He becomes the judge providence¹⁴⁶.

3.1.1. The place of the judge in the contract

Article 33 of the Civil Code Book III inspired by the famous phrase of Domat, one of the drafters of the French Civil Code of 1804, has the following formula: agreements legally formed become a law for those who have entered into them.

The principle here is therefore the principle of intangibility which corresponds to the binding force of contracts for the parties. The principle binds similarly the judge who should respect and ensure respect for the contract. The judge is a servant of the contract and must refuse any request which would tend to modify or revise the contract¹⁴⁷.

146 Frédérique Eudier, Modèles et anti-modèles dans le rôle du juge en matière contractuelle, available at http://www.institut-idef.org/Modeles-et-anti-modeles-dans-le.html accessed on 19^th October 2011

147 F. FERRAND, Droit privé allemand, Paris, Dalloz, 1997, n° 271

46

The judge will have his role in the contract, in case of non-performance of that contract or in case of poor performance. Indeed, if one party fails to perform his obligation, the other party may seek a court resolution of the contract¹⁴⁸. Termination of the contract allows the contractual balance because the aggrieved party will be released from its obligation.

3. 1. 2. The powers of the judge regarding the contract.

Some modifications may arise during the execution of the contract. This occurs especially when the legislature adopts a new law and decided that it is immediately applicable to contracts in progress. It often happens that despite the principle, new laws apply to the contract concluded previously.

What interests us is the hypothesis of a modification of the contract in which the judge intervenes. The change is made by the judge but by authorization of the law that is to say that we are dealing with a situation where the legislature will allow the judge to modify a contract. The judge may also grant himself the power to modify the contract in a given situation. In this case, the law creates exceptions to the principle of intangibility of the contract¹⁴⁹.

Some authors like Denis Philippe and others have recommended a transaction when a party fails to fulfill his contractual obligations due to occurrence of an unpredictable event at the conclusion of the contract: the judge who finds the unpredictability could impose upon the parties the obligation to renegotiate their contract¹⁵⁰. If one party comes to refuse this negotiation, he would see his contractual liability engaged¹⁵¹.

148 F. TERRE et al. Droit civil. Les obligations, Paris, Dalloz, 2002, p. 576.

149 A. BENABENT, Droit civil, Les obligations, 8^e éd., Montchrestien, Domat Droit Privé, 2001, n° 311.

150 J.L. AUBERT, Droit des obligations, Le contrat, 2^e éd., Paris, Dalloz, 2000, p. 98.

151 Ibid.

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This idea is inspired by the renegotiation clauses existing in some international contracts such as transport contracts and international sale contracts. It is a clause stipulated in the contract, and which allows each party to seek a reorganization of the contract, if it occurs a change in circumstances that alters the contractual balance which may subject to another party "unfair rigor"¹⁵². This clause comes from international trade and is frequently used in context of international trade. It is best known as the clause of "hardship"¹⁵³.

3.2. Maintaining a de facto equality

The principle of consensualism is a legal principle that the contract should not be formed in a particular form. Under this ideology, the predominant criterion for the existence of the contract will be the existence of consent and a voluntary agreement of the parties.

Even where the contract is a legal obligation, consent is always required, even though one might think that the law can substitute consent. This is not, and cases in which consent is not possible are very rare and motivated by reasons of public order for example in case of requisition. The judges are nonetheless very attached to the principle of consensualism¹⁵⁴.

3.3. Nature of the legal effects

Our law gives the judge great freedom in choosing the mode of intervention in contracts where there has been a change of circumstances in the contract. In determining the legal regime, a performance of the contract consistent with its economy must be guaranteed by priority¹⁵⁵.

152 X. Hardship clause on international contracts, available at

http://papers.ssrn.com/sol3/papers.cfm?abstract id=1490751 accessed on 5^th October 211

153 X. Trade issues, http://www.fita.org/webindex/ accessed on 5^th October 2011

154 RC 0039/05/TD/Kro of 30 September 2005, op. cit

155 A. BENABENT, op. cit, n^o 345

48

Once established the circumstances referred to in contractual unpredictability, the judge will refer the parties to the negotiating table if a solution on the dispute can be envisaged amicably¹⁵⁶. Otherwise, he will adjust a contract according to the realization of the purpose of the contract, he can impose modalities in this adjustment he deems necessary¹⁵⁷. When the contractual objectives have become permanently unattainable, he will dissolve the contract¹⁵⁸.

3.4. Criteria and measures of burden sharing between the contractors

It is argued that the consequences included within the assumed contractual risk bear the burden of the party prejudiced by the change of circumstances¹⁵⁹. The distribution of burden in accordance with the contractual risk is not only consistent with the contractual justice but, more importantly, it introduces a factor of security and legal logic¹⁶⁰.

When the risk has not been assigned and the contract can no longer be executed, the court will dissolve the contract by ensuring appropriate compensation for expenses incurred and reimbursement of profits made by contractors.

When the risk has been assigned and that the performance of the contract is no longer possible, the judge may grant damages intended to compensate partially the other party of the rupture of contract; compensation will be allocated in equity, depending on the contractual risk assumed.

156 RC 0040/07/TGI/NGYE of 19^th March 2007 of Higher Instance Court of Nyarugenge, Unpublished

157 J.L. AUBERT, op. cit, p.105.

158 Ibid.

¹⁵⁹J. LACOMBE, Théorie générale des obligations en droit malgache, Paris, Editions Cujas, 1967, p. 124 160 Ibid.

49

CONCLUSION AND RECOMMANDATIONS

The good faith ensures in the performance of contract, compliance with the mutual expectations of contractors and makes sure in some contracts, the implementation of collaboration and solidarity necessary to achieve the objectives set out from the contractual economy.

Consideration may be given to the main problems of applying the concept of contractual unpredictability namely non-imputability and the unpredictability of circumstances and their effects, the distribution of contractual risk, the determination of the economy of the contract and the radical change of the obligation assumed.

First, the new circumstances and their effect on the contract should not be attributed to the party invoking the disruption of the economy of the contract.

The new circumstances should, in principle, be of a supra-individual i.e. beyond the control of any party. In addition, the contractor's simple act is not enough to establish imputability. The latter implies the violation of specific contractual obligations or general obligation of diligence.

If an event imputable to the contractor has competed with a fault to a radical change of the obligation assumed, the contractor may invoke contractual unpredictability to the extent where the latter results from this new event.

Concerning the problem of the unpredictability of circumstances and their effects, we believe that the unpredictability must be an element of appreciation of risk.

The contractor shall bear the expenses resulting from a change in circumstances which he could assess the impact on conclusion of the contract. However, it is not always possible to insert a clause relating to the change of circumstances, we think of certain adhesion contracts where the economic

50

superiority of one party prevents the other to make any changes to terms of the agreement.

It is on the essence of the contract that the parties must bear the change in circumstances affecting their contractual benefits. This is the first rule of distribution of risks.

The attribution of burdens arising from new circumstances will be determined also by the contractual terms, their interpretation, qualification of the contract which allows to discover its nature and therefore the rules of law or jurisprudence of risk sharing that govern them. Usage and equity are subsidiary sources for determining risk.

It is still necessary to determine whether the change in circumstances is likely to radically alter the obligation assumed, as it results from the contractual economy. If the contract loses its purpose, if the circumstances essential to the eyes of the parties are changing profoundly, the radical change of the contractual obligation is confirmed.

Only an extraordinary and unexpected change in circumstances having effects on the contract of an exceptional and unforeseeable nature may lead to the application of the theory of unpredictability.

Consideration could be given in our positive law on the one hand a concept that organizes the change of a situation in which the parties have concretely considered its maintenance as essential, and also a concept for the profound imbalance of benefits generated by the unpredictable and extraordinary change of circumstances.

The principle of the Convention-law envisaged by our Civil Code should be attenuated during the interpretation of conventions disrupted by

51

circumstances reasonably unpredictable at the conclusion of the contract. Thus, the judge will be guided in its interpretation by equity to restore the lost equilibrium.

52

BIBLIOGRAPHY

I. Legal Texts

1. Loi N° 42/1988 du 27 octobre 1988 portant titre préliminaire et livre premier du code civil, B.O., 1989 P. 9

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1. RC 0140/07/TB/KCY of 05 September 2007 of district court of Kacyiru, unpublished

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53

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6. Civ. Bruxelles, 24 mai 1884

7. Cons. d'Et., 8 février 1918, société d'éclairage de Poissy

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54

DAVID, R., L'imprévision dans les droits européens, Paris, Etudes Jauffret, 1974

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55

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35. VOIRIN, P., De l'imprévision dans les rapports de droit prive, Paris, Dalloz, 1922

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4.

56

PHILIPPE D., «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

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2. KALIMUNDA, E., La bonne foi en matière contractuelle, mémoire, Butare, UNR, Faculté de Droit, 1991

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VI. Course Notes

1. BASOMINGERA, A., Cours de droit administratif, Notes de cours, Butare, UNR, Faculté de Droit, 2002-2003

2. BASOMINGERA, A., Cours de Droit administratif, Notes de cours, Butare, UNR, Faculté de Droit, 2009

VI. Electronic references

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2. X. La notion de bonne foi dans les contrats, available at http://lexinter.ne t/JF/bonne foi 1 .htm

3. X. Duty of cooperation and loyalty, available at

http://www.erudit.org/revue/cd /1997/v 3 8/n 2/043 4 43ar.pdf

4. 57

X. Theory of unpredictability, available at

http://www.centrorisorse.org/theory-of-unpre dicta bility . html

5. X. Trade issues, available at http://www.fita.org/webindex/

6. X. La bonne foi et la loyalité, available at http://www.usherbrook. ca/droit/fileadmin /site s/droit/ docu ments/RDUS/volume 26/26-2-lefebvre.pdf