“Companies affected by the DANA are absolutely legally entitled to review and readjust the conditions of their contracts,” explains Tomarial, the councillor. Javier Orduña the effective application of the rebus clause in an exceptional situation such as that suffered by 84 municipalities in the province of Valencia since October 29. Professor of Civil Law at the University of Valencia, former Supreme Court judge and rapporteur of several rulings that have set jurisprudence in favor of the recognition of the rebus clause and its application in Spain. The 'rebus sic stantibus' clause refers to the fact that a contract is maintained as long as the conditions and circumstances under which it was initially agreed are maintained. An exceptional situation such as the DANA justifies the adjustment of contracts, as the conditions under which the agreement was reached have been drastically transformed.
“Negotiating the terms of the contracts is more than opportune at this time. This will help the companies affected by the DANA to overcome the situation they are experiencing. The Supreme Court's jurisprudence supports the application of the rebus clause so that they can adapt to the crisis caused by the flood. They have the right to use it to review their contract,” he explains. Javier Orduña. This opinion was also defended at the 2nd Clause Rebus Congress held this week in Valencia, where legal experts demanded that this figure be legislated in Spain. In this way, in addition to being supported by court rulings, it would be regulated and would avoid the need to demand its application in many cases by litigating in court.
“In Europe, throughout our environment, this right to compulsory renegotiation of contracts is regulated when exceptional situations arise that substantially vary the conditions under which the agreement was originally reached. This makes renegotiation between the parties easier and more successful. That is why the legal world demands that the rebus clause be legislated in Spain and incorporated into the Civil Code. It is something that was already requested with the COVID crisis and at this time it is a requirement,” explains the Tomarial counselor. Javier OrduñaThe General Council of the Spanish Bar Association requested this initiative from the legislator during the Congress dedicated to the rebus clause and held at the Valencia Bar Association.
Tomás Vázquez Lépinette, President of Tomarial and Head of its Legal Department, believes that “at this very delicate time for thousands of companies in Valencia affected by the DANA, from our office we are advising our clients on the possibility of renegotiating certain contracts and obligations using their right to the rebus clause. Its legal usefulness is beyond any doubt and, ultimately, it can be claimed in court with the support of the current doctrine of the Supreme Court. Having in our team as an advisor Javier Orduña, who is the greatest authority on the subject and the person who innovated its jurisprudence in Spain, enables us to defend the interests of companies in the most effective way. We trust that this legal instrument will be an important support for companies that need to overcome the very serious consequences of the DANA.”
