[Direct answer]In the Beijing area, the key difference between the two systems is that force majeure focuses on the obstacles to performance itself, while the change of circumstances focuses on major changes in the basic conditions of the contract. According to Article 180 of the Civil Code of the People's Republic of China (effective January 1, 2021), force majeure refers to objective circumstances that are unforeseeable, unavoidable, and insurmountable. According to Article 590, the parties may be partially or entirely exempted from liability, but the parties shall notify each other in a timely manner and provide evidence within a reasonable period; according to Article 533, if major changes in the basic conditions occur after the contract is established that are unforeseeable and do not belong to commercial risks, and it is obviously unfair to continue to perform the contract for one party, the party affected by the adverse impact may request to renegotiate the contract. If the negotiations fail, the party may request the court or arbitration institution to modify or terminate the contract. Before making a claim, the party should first determine the nature of the event and then choose the appropriate approach and focus on providing evidence.

I. Problem background and typical scenarios

The two types of claims are common in long-term, high-investment contract scenarios: construction projects may face drastically increased costs due to policy adjustments or changes in on-site conditions; housing leases may suffer from a sudden drop in customer traffic due to changes in the business environment; supply chain orders may be difficult to fulfill at the original price due to abnormal fluctuations in raw material prices; and exhibitions and performances may be forced to cancel due to sudden public events. A common misunderstanding among parties is to confuse the two and make a general claim that "there's no need to perform if the circumstances change." As a result, they fail to prove the elements of force majeure and cannot clarify how continued performance would be manifestly unfair, making their claims difficult to gain support. Some companies also mistakenly believe that changes in circumstances can directly exempt them from liability, ignoring the statutory procedures and obligations to negotiate. For issues involving contract clause design and loss-sharing agreements, they can refer to the following provisions:Business and contract dispute services for enterprisesEvaluation.

II. Key points of contention

The focus of the controversy lies in four aspects. Firstly, the nature of the event: whether it constitutes an objective situation that cannot be foreseen, avoided, or overcome (force majeure), or a major change that cannot be foreseen and does not fall under commercial risks (change of circumstances). Normal fluctuations in market prices and operational misjudgments are typically classified as commercial risks and do not apply to changes of circumstances. Secondly, the time requirement: the event must occur after the contract is concluded but before its performance is completed. Thirdly, the standard of consequences: force majeure focuses on the extent of the inability or hindrance to perform, while change of circumstances focuses on whether continued performance would be manifestly unfair to one party. Fourthly, procedural requirements: in the case of change of circumstances, it is necessary to renegotiate with the other party first and, if no agreement is reached within a reasonable period, to request a modification or termination of the contract; in the case of force majeure, it is necessary to notify the other party in a timely manner and provide proof within a reasonable period, while fulfilling the obligation to mitigate losses.

III. Professional analysis by Henglue Lawyers

From practical experience, the primary reason for the failure of such claims is not that the incident itself is not serious enough, but that the wrong approach or mismatched evidence are chosen. A common practice of parties is to issue a general notice of "impossibility of performance due to force majeure", without attaching any supporting materials or distinguishing which obligations were hindered and to what extent; or to directly request the termination of the contract without first consulting the other party or providing evidence of the obvious unfair consequences that would result from continued performance. Another pitfall in practice is mitigation: after a party stops performing on the grounds of force majeure, it allows losses to escalate. Even if the final responsibility is partially exempted, the party may still have to bear the expanded losses on its own. A more prudent approach is to first select a claim framework based on the nature of the event, then organize evidence around the four elements of "occurrence time—causality—impact extent—fulfillment of notice and mitigation obligations", and simultaneously keep records of consultations.

IV. Practical suggestions and legal basis

The legal basis is Article 180 (Definition and Exemption from Liability for Force Majeure) of the Civil Code of the People's Republic of China (effective January 1, 2021), Article 533 (Re-negotiation and Request for Modification or Termination under Changed Circumstances), Article 563 (Termination of the Contract Due to Force Majeure Preventing the Achievement of the Contractual Purpose), and Article 590 (Notice and Proof Obligations for Inability to Perform Due to Force Majeure); the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the General Provisions of the Contract Chapter of the Civil Code of the People's Republic of China (Interpretation No. 13 of 2023, effective December 5, 2023) further refines the identification and application of changed circumstances. Practical suggestions: First, pre-agree in the contract on the handling mechanism and risk-sharing ratio for policy changes and abnormal price fluctuations; Second, immediately notify the other party in writing after the event, explaining the specific obligations and the extent of the impact and attaching supporting materials; Third, take mitigation measures simultaneously to avoid losses expanding; Fourth, complete the re-negotiation process and keep records before claiming changed circumstances; Fifth, distinguish between "inability to perform" and "unfair performance" in terms of evidence and prepare different proof directions accordingly. For construction and real estate-related contracts, reference can be made to the relevant provisions.Real estate sales and construction project servicesThe approach to handling major disputes is that they can be resolved throughSpecial services and other case servicesYou can also seek professional support from organizations or refer to relevant resources for further assistance.Beijing Henglu Law FirmYou can learn about the relevant case-handling experience on the official website.

5. Henglu Law Firm's Advice

There are two particularly important reminders. First, a change in circumstances is not a "rescission clause". The court is more cautious in reviewing "major changes that do not belong to commercial risks". Generally, changes purely due to market fluctuations or the company's own operational mistakes will not be supported. Moreover, claiming a change in circumstances is different from claiming rescission. The request should be specific and actionable. Second, the establishment of force majeure does not mean full exemption from liability, but partial or full exemption from liability according to the actual impact. Moreover, the obligation to provide timely notice and evidence must be fulfilled, otherwise the company may be liable for the expanded losses. In addition, the issues of statute of limitations and preclusion periods cannot be ignored. Delaying the claim may directly affect the effectiveness of the remedy.

VI. Frequently Asked Questions

Q1: Can a claim of a change in circumstances be supported, and which is easier to prove compared to force majeure?

The two approaches are different and cannot be simply compared in terms of difficulty. Force majeure focuses on the obstacles to performance itself. Once it is established, the party concerned may claim partial or full exemption from liability in accordance with Article 590 of the Civil Code of the People's Republic of China; while the change of circumstances focuses on the significant changes in the basic conditions of the contract. Once it is established, it does not necessarily exempt the party from liability. The parties must first negotiate with each other, and if no agreement is reached, they may request the court or arbitration institution to modify or terminate the contract. Moreover, the adjudicator will weigh the matter according to the principle of fairness. In judicial practice, the determination of "significant changes that do not belong to commercial risks" is rather cautious. Market price fluctuations and operational judgment errors are usually not supported. Before making a claim, it is necessary to first determine whether the event meets the elements of unforeseeability, unavoidability, and insurmountability.

Q2: What evidence do I need to prepare if I claim that there has been a change in circumstances or force majeure?

In terms of force majeure, the party should prepare government announcements and control documents, authoritative identification materials of natural disasters or sudden public events, notices of suspension of work and production, certificates of impeded performance, as well as letters, emails, and receipt certificates that have been timely notified to the other party and explained the impact. In terms of changed circumstances, the party should prepare the contract text and pricing basis, data on price or policy changes before and after the event, cost composition and profit estimation, financial information showing that continued performance would lead to obvious unfairness, and records of the renegotiation process. Both claims require proof that the event occurred after the contract was established, could not have been foreseen at the time of contract formation, and there is a causal relationship between the inability to perform or the obvious unfairness of the performance.

Q3: What are the approximate litigation fees and attorney's fees for such contract disputes?

The litigation fees shall be paid in accordance with the "Measures for the Payment of Litigation Costs", calculated on the basis of the amount of the litigation request and accumulated in stages. The losing party shall bear the fees, and if the plaintiff partially wins and partially loses, the fees shall be shared proportionally. For requests to modify or terminate a contract that do not involve specific payment amounts, the fees shall be charged on a per-case basis or according to other standards, subject to the court's notice. Lawyer's fees are generally determined through negotiation on a per-case basis or as a percentage of the contract value. For major and complex cases, a phased fee charging method may be adopted, which shall be specified in the entrustment contract and there is no unified standard. It is recommended to first assess the remaining performance value of the contract and the losses that will be incurred if the contract continues to be performed, compare the litigation costs with the potential benefits that may be obtained, and then decide whether to initiate legal proceedings.

Q4: Generally, how long does it take to reach a conclusion when claiming to modify or terminate a contract?

The first-instance ordinary procedure is generally concluded within six months, and the summary procedure is concluded within three months; such cases often involve audits, cost assessments, or loss appraisals. The appraisal period is not included in the time limit for trial, and the actual period will be extended accordingly. If one party appeals, the second-instance procedure is generally concluded within three months. After the judgment takes effect, if it involves the return of funds or compensation, it is necessary to apply for enforcement. Overall, it often takes several months or even more than a year from filing a lawsuit to final resolution. Parties should prepare for the expected timeframe and take mitigation measures simultaneously in the early stages of the dispute to avoid continuous expansion of losses and affect the final determination.

Q5: If I encounter obstacles in performance of the contract, how should I specifically assert my rights?

It is recommended to follow four steps: First, promptly fix the evidence, including the event proof materials, the scope of impact, and the losses that have occurred, and notify the other party in writing as soon as possible; Second, distinguish the nature of the event and determine whether it belongs to force majeure or a change of circumstances, to avoid general claims that lead to difficulties in review; Third, prioritize initiating consultations, proposing specific amendment plans or termination conditions, and fully preserving the consultation records; Fourth, if no agreement is reached, initiate litigation or apply for arbitration within the statute of limitations to request amendment or termination of the contract and claim corresponding responsibilities. Note that force majeure can only exempt corresponding responsibilities, but cannot replace consultations and mitigation obligations. Allowing losses to expand may affect the final determination results.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Corporate commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.