Study of the Right of Government to Change Contracts Unilaterally of PPP Project in the Context of Chinese Civil Law

Abstract

The PPP project contract as an incomplete contract with long-term, complex and uncertain characteristics. The Contract Law gives a party the right to change unilaterally on the basis of the principle of “frustration of contract.” The contract law stipulates that certain contracts may be unilaterally changed under certain circumstances. The change of the contract is based on the ex parte implication, which changes the civil legal relationship. In the PPP contract, giving the government the right to change contracts unilaterally is better to protect the public interest. The right need of government’s unilateral change of contractual has a very important relationship with the public interest, changes in government public service demand and changes in the situation caused by the long-term nature of the contract. In order to safeguard the public interest, meet the changes in the actual needs of public services and the change of circumstances, the government could also change the contract unilaterally on the basis of the theory of “frustration of contract”. When the government exercises the right to change the contract unilaterally due to the public interest, changes in the actual demand of the public service, and changes in the situation, the contract counterparty shall be compensated accordingly.