Possible application of rebus sic stantibus clause in real estate operations as a result of Covid 19

Abstract

The global COVID-19 pandemic has had an outsized economic impact, underscoring the need to use legal mechanisms that increase the flexibility of the current contractual regime. 

This paper examines the feasibility of a rebus sic stantibus clause in the framework of the contracts affected by such pandemic. For that purpose, a jurisprudence analysis of the requirements and potential effects of the clause is carried out. Furthermore, its prior usage in the earlier economic crisis is analyzed, with a special focus on real estate operations. Finally, we aim to extrapolate our findings to assess potential solutions to conflicts derived from the new economic context.