Risk-allocation in case of systemic risks in contract law: towards a more flexible approach
PhD student: Mr J. Reniers
Promotors: Prof A.L.P.G. Verbeke, Prof B. Tilleman
Duration: 1/9/2020 - 31/8/2024
How should contract law allocate risks between contracting parties if a systemic crisis troubles not only the contractual equilibrium, but also the stability of the economic system? Take the following pandemic-examples. If the government forces a tenant to close its business, does he still have to pay the rent? If an education centre cancels all refresher courses, should the advanced money always be refunded to the clients? If air traffic is immobilized, should airline companies refund all the tickets and incur severe losses? Contrary to other jurisdictions, the Belgian dogmatic contract law rules of risk allocation generally designate only one party as risk-bearer. This feels unfair and for that reason, judges and governmental authorities circumvent these rules by interpreting them and adopting emergency regulation respectively. Yet this ad-hoc approach is not a solution to the problem. On the contrary: in the absence of a uniform model of risk-allocation, case outcomes will unreasonably diverge and the impact of emergency regulation on contract law will remain unclear. This research will therefore transcend the rigid dogmatic rules and develop a model of risk allocation applicable to systemic unforeseen risks. This is to bring back legal certainty and to guarantee a flexible risk-allocation recognizing the interests of contracting parties. It is hypothesized that this model may eventually function as a general contract law tool in less extreme cases.