Can I withdraw from a contract if the circumstances have changed?
June 17, 2023 | 30,00 EUR | answered by Konrad Höfer
Dear contract law attorney,
My name is Heike Ehlert and I am reaching out to you with an urgent matter. Two months ago, I signed a contract for the lease of a commercial property. At that time, everything seemed perfect - the location, the amenities, and the rent were exactly what I was looking for. However, the circumstances have changed drastically since the contract was signed.
Due to the current economic situation and the impacts of the Corona pandemic, I have experienced significant loss of revenue in my business. I am no longer able to pay the agreed rent and am on the brink of bankruptcy. The current commercial property is proving to be a financial burden under these circumstances that I can no longer afford.
My concern now is whether I can withdraw from the contract to secure my economic livelihood. Are there legal options to challenge or terminate the contract due to the changed circumstances? What consequences could such a withdrawal have, and how can I best proceed to protect my interests?
I would be very grateful if you could assist me in this difficult situation with your expertise and knowledge. I look forward to your assessment and possible solutions.
Sincerely,
Heike Ehlert
Dear Mrs. Ehlert,
I would like to thank you for your trust and assure you that I take your concerns seriously and will do my best to help you in this difficult situation.
In your case, it concerns a commercial property lease agreement that has become an existential burden for you due to the changed economic circumstances and the impact of the Corona pandemic. You want to know if there are legal possibilities to withdraw from the contract in order to secure your economic existence. This question is understandably of great importance to you and requires a careful legal examination.
In German contract law, the principle of pacta sunt servanda applies, which means that contracts must be fulfilled. However, there are exceptions and legal regulations that allow for withdrawal from a contract under certain circumstances. In the case of a lease agreement, circumstances such as undue hardship, for example, could entitle a party to terminate or challenge the contract.
In your case, the significant loss of revenue due to the Corona pandemic could be considered an unforeseen event that constitutes undue hardship for you. In this case, an adjustment of the contract in the form of a rent reduction or a temporary deferral of rent payments could be considered. However, it is important that you consider certain legal requirements and substantiate your argumentation.
First, you should try to contact your landlord and discuss the situation openly and honestly. Perhaps they are willing to find a solution together that is acceptable to both parties. If an agreement is not possible, I recommend that you seek advice from an experienced contract law attorney who can represent your interests in court.
It is important that you gather all relevant documents and evidence to support your argumentation. Depending on the individual case, it may also be useful to explore alternative options such as out-of-court dispute resolution or a mutual termination of the contract.
In conclusion, I would like to emphasize that there are no blanket answers in your case and a detailed legal examination is necessary. I am happy to discuss your situation in detail and explore possible courses of action with you.
Sincerely,
Konrad Höfer, Attorney at Law
