Times of War and its Impact on Construction Agreements - The rebus sic stantibus principle

These are turbulent times. 2020 began with a global pandemic. Governments around the world pumped vast amounts of money into economies to cushion the impact of the sharp slowdown in economic growth and consumption. Two years later, in 2022 and again in March, Russia declared war on Ukraine, which have caused the prices of many of the basic raw materials used in the construction sector to rise, not to mention a high inflation as a result of delaying some of the economic consequences of the pandemic on the global economy.

In this course, we’ll look at the rise in construction costs and how it's forcing contractors to review their budgets and seek solutions to mitigate the effect of the increase of the price of raw materials and energy required for construction, which has led many contractors to invoke the rebus sic stantibus clause.

By the end of this course, you should be able to:

1. Understand whether the rebus sic stantibus principle can be applied to construction agreements that have been affected by the war in Ukraine
2. Describe what the rebus sic stantibus clause allows and what it provides for all parties