The financial and legal parameters of commercial contracts are set by the parties according to the economic context existing at the time of their conclusion. However, these initial circumstances may change and lead to a contractual imbalance. This is why, in order to perpetuate their relationship and preserve a contractual balance, it is recommended that the parties provide, upstream, the safeguards necessary to maintain the latter.
Among the changes in circumstances that may substantially affect the relationship and jeopardize the balance necessary to maintain the contractual relationship, we can cite, as an example, the conditions and methods for setting prices. Indeed, the determination of prices is generally based on a certain number of factors – economic and conjunctural – which can undergo considerable variations, particularly in times of crisis.
For example, an increase in the price of raw materials or the forced closure of production facilities are all factors that can lead to a variation in contractual prices. In this respect, the war between Russia and Ukraine has recently caused major supply difficulties, as well as a sharp rise in the price of energy and certain raw materials such as wheat.
In addition, the restrictive measures still in place to control the Covid-19 pandemic (particularly those in China) are a source of instability that can affect contractual relations.
Therefore, in order to ensure the continuity of their relationship and to preserve their respective interests, the parties are sometimes forced to renegotiate the terms and conditions of performance of the contract initially agreed upon. However, in the absence of recognition of the theory of unforeseeability in Moroccan law and in the absence of a revision clause (i), this renegotiation may sometimes prove difficult and presupposes, at the very least, the prior consent of each of the parties (ii).
Principle of the binding nature of contracts
Moroccan contract law is based on the principle that contracts are binding. Article 230 of the Dahir on Obligations and Contracts (the “DOC”) provides that: “Contractual obligations validly entered into shall be binding on those who have made them, and may be revoked only by their mutual consent or in the cases provided for by law.
This principle is based on the fact that the parties to a contract agree on the terms and conditions of its performance. Once these terms and conditions have been formalized, each contracting party is bound to respect its contractual commitments. Consequently, the parties to a contract are only authorized to modify the scope or extent of their contractual obligations if they consent to do so (in particular by means of a rider) or if the contract expressly provides for it, through a specific revision clause.
The consent of the parties may be given ab initio at the time of the conclusion of the contract, but also afterwards. In this regard, the Court of Cassation has specified that “the signing of the final acceptance report without reservation on the revision of the price of additional works outside the contract, when said works were carried out before its signature, renders this report enforceable against the parties” (Court of Cassation, Administrative Chamber, December 8, 2016, No. 790/2). In this case, the Court considers that the signing of the minutes proves that the parties agreed to revise the stipulations of the contract binding them. The additional work and the revised price were therefore expressly agreed upon, and must be made enforceable against the co-contractors.
Moreover, unlike French private law which, since the 2016 reform of contract law, allows for the revision of a contract when (x) a change in circumstances occurs that could not have been foreseen at the time of the conclusion of the agreement, (y) rendering its performance excessively onerous, (z) for a party who had not agreed to assume the risk, the Moroccan legislator has not yet enshrined the theory of unforeseeability. In fact, Moroccan law does not contain any specific provision allowing or setting out the terms and conditions for the revision of a contract.
However, in order to avoid any difficulty, the parties may have recourse to contractual mechanisms allowing them to revise their initial agreements in the event of a change in circumstances that could not be foreseen at the time of conclusion of the contract.
However, in order to avoid any difficulties, the parties may have recourse to contractual mechanisms enabling them to revise their initial agreements in the event of a change in circumstances that could not have been foreseen at the time the contract was concluded.
This is the case with so-called revision clauses (which may take the form of indexation clauses or “hardship” clauses). These clauses allow, depending on the case, either an automatic modification of the contract (as in the case of an indexation clause), without the need for the parties to engage in negotiations or to modify the contract by amendment, or a renegotiation of the terms of the contract (in the case of a hardship clause).
Judicial review of the contract has also been accepted by case law. In a decision of
March 5, 2020, the Commercial Chamber of the Court of Cassation considered that “the contract by which the parties undertook to purchase the pipeline installation works within the contractual time limits determined by stipulations which had already entered into force, but which were confronted with the unavailability of the pipelines for the execution of the works may authorize the Court to modify said contract to extend the deadlines, even in the absence of stipulation by the parties of the possibility of revision of the contract, in order to avoid terminating the contract” (Court of Cassation, Commercial Chamber, March 5, 2020, No. 119/2020). The judge may thus revise the terms of the contract when the conditions of its performance have changed, due to a fact beyond the control of the parties.
Amicable renegotiation of agreements
Apart from the release or liability exemption clauses allowing the co-contractor concerned to withdraw totally or partially from its contractual obligations (force majeure in particular), and generally leading to the total or partial termination, or even the suspension, in certain cases, of the agreements, the parties concerned with maintaining their contractual relations have no choice but to go through amicable negotiation in order to revise the terms of their initial agreements. This revision is then formalized through the conclusion of an amendment signed by the parties.
In fact, as indicated above, the revision of the contract is allowed when it is expressly agreed by the parties, in the cases provided for by the law and when it is pronounced by the judge.
In the absence of a revision clause, it is up to the parties to initiate, on an amicable basis, an adequate renegotiation necessary for the prosperity of their relationship.
The renegotiation of the contract must, however, be based on the principles of fairness and good faith. Article 231 of the DOC provides that: “every undertaking must be performed in good faith and is obliged not only to what is expressed in it but also to all the consequences which the law, usage or equity give to the obligation according to its nature.
It is futile to attempt to rebalance a contract when renegotiation does not satisfy this requirement. Indeed, the very purpose of renegotiation is to preserve the respective interests of the co-contracting parties and to adapt the conditions of performance of the contract to current economic circumstances.
This being said, in practice, it must be noted that, in the absence of revision or unforeseen circumstances clauses, this amicable renegotiation does not often prove easy, the parties engaging, in this case, in a veritable arm wrestling match to try to preserve their own interests.
Thus, in order to limit the risk of litigation and legal hazards, it is highly desirable that the parties take care, prior to the conclusion of an agreement, to include revision clauses, and pay particular attention to their drafting.
The insertion of a mediation clause can also be useful in this context and contribute to facilitating a renegotiation of their agreements. In this regard, Law No. 95.17 on arbitration and conventional mediation, published in the Official Bulletin of June 13, 2022, includes specific provisions allowing the parties to resort, subject to the provisions of Articles 1099 to 1104 of the DOC, to mediation as a means of dispute resolution and the possibility of appointing a mediator in order to settle a dispute that has arisen or is likely to arise subsequently.
Dahir of Ramadan 9, 1331 (August 12, 1913) establishing the Code of Obligations and Contracts.
Dahir n°1-22-34 of 23 chaoual 1443 (24 May 2022) promulgating the law n°95-17 relating to arbitration and conventional mediation.
Ahlam BOUTAYBI and Karim ZAOUACQ, “Temps de crise : la renégociation amiable des contrats au Maroc et dans les pays de l’OHADA”, Revue du droit des affaires en Afrique, Regard Juillet 2020, n°2.
Younes OUBEJJA, “Théorie de l’imprévision à l’épreuve de la pandémie de Covid 19”, Maroc diplomatique, 26 May 2020.
Written by Ali Bougrine, Rim Tazi, and Oumnia Benkirane.