Pacta sunt servanda – a maxim and its exceptions in comparative perspective

This conclusory chapter summarises and highlights themes that are emerging from the chapters collated in this book. The present collection of essays provides a rich array of materials demonstrating the continued vitality and strength of the principle of pacta sunt servanda. Yet, it is also clear that circumstances can arise when unstinting insistence on performance and execution of an agreement can cause hardship and unfairness.

The scope and strength of the pacta sunt servanda principle applies are not immutable. A number of doctrines, including impossibility, frustration, change of circumstance and force majeure, illegality as well as rights of withdrawal, create exceptions to the binding power of contracts. This chapter submits that the limits of the principle should be determined by taking into account not only the circumstances that exist between the parties, but also reflect community expectations on the appropriate balance between contractual stability and flexibility.

The hardship created by the COVID-19 pandemic has raised new challenges for the notion of the binding force of contracts. It is a common observation of the authors in this collection that courts across East Asia have so far resisted the temptation of softening the pacta principle. As more litigation makes its way through the courts systems, welcome judicial guidance will emerge. It would be a fruitful area of research to scrutinise these future developments in the case law, and to contrast and evaluate the approaches in future cross-jurisdictional comparisons.