Rebus Sic Stantibus

The contract can only be valid if the conditions prevailing at the time of contracting continue to exist at the time of performance.

If the conditions have changed that it becomes manifestly beyond the intention of the parties, the obligor may be released. This applies whether the change happens in whole or in part.

Requisites:

1. Such event or change is unforeseen at the time of the execution
2. Performance is extremely difficult but not impossible
3. Event was not caused by one of the parties
4. Contract is for a future prestation

“difficulty” – must place one party by the unforeseen event at a disadvantage. Mere inconvenience or increased expenses are not sufficient to relieve the debtor from a bad bargain. #Case/TagaytayRealty-vs-Gacutan

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