[Direct answer]In the Beijing area, it is possible to request a modification or termination of a contract, but the threshold is quite high: if major changes that could not have been foreseen by the parties at the time of contract signing and that do not constitute commercial risks occur after the contract is established and before its performance is completed, and if continued performance would be clearly unfair to one party, the party may request the court or arbitration institution to modify or terminate the contract—note that it is a "request," and the decision-making power lies with the adjudicator. Moreover, further negotiation and consultation are prerequisite actions. The definition of policy adjustments and market upheavals, as well as the two requirements of time and outcome, are extremely stringent.

I. Problem background and typical scenarios

Typical scenarios of changed circumstances: Industrial policy adjustments (such as the "Double Reduction" policy, purchase restrictions, and environmental protection measures) make it impossible to carry out the main business; after signing long-term leases, regional planning adjustments lead to drastic changes in operating conditions; and the sharp increase in raw material prices by several times results in huge losses when fulfilling processing contracts. The difference between force majeure and changed circumstances is often confused: force majeure tends to be "impossibility of performance", while changed circumstances tend to be "possibility of performance but unfairness".

II. Key points of contention

First, the time element. Major changes must occur after the contract is established and before its performance is completed. Policy trends known before signing the contract do not count. Second, the result element. The changes must lead to the obvious unfairness of continuing to perform the contract or the failure of the contract's purpose. "Earning less" does not constitute a breach, but "performance resulting in huge losses and the complete failure of the contract's purpose" does. Third, the boundary of commercial risks. Predictable market fluctuations and industry cycles belong to commercial risks. The distinction between "risks and changes" is the core dispute in such cases.

III. Professional analysis by Henglue Law Firm

The success or failure of invoking a change of circumstances depends on comparing two judicial cases. Counter-example: A training institution leased a house to operate non-academic children's training programs. Due to the impact of the "Double Reduction" policy, the court ruled that the change of circumstances occurred before the policy was issued, and the business scope would not necessarily be shut down due to the policy. Therefore, the court did not support the claim of exemption from liability and ordered the lessee to share the deposit loss according to fault - the termination occurred before the policy and the policy did not necessarily lead to closure, both of which failed to meet the time and result requirements of a change of circumstances. Example: A cinema leased a store to screen movies. After the pandemic, it closed for more than half a year and faced restricted personnel flow. The court held that the pandemic constituted a major change unforeseeable at the time of contract signing and not within the scope of commercial risks. Continuing to enforce the original rent standard would be clearly unfair, constituting a change of circumstances. According to Article 533 of the Civil Code, the rent was adjusted appropriately - the time occurred after the contract was established, the result was manifestly unfair performance, and the court chose to "adjust the rent" rather than terminate the contract, reflecting the principle of "giving priority to adjustment over termination". Two practical lessons from these cases: 1. Claimants should fix the timeline (the date of policy announcement, contract signing, and proposal for termination) and quantify the impact (income decline curve, cost structure, and loss calculation of continued performance). Written negotiation records serve as evidence of the preliminary procedure. 2. Claims should prioritize adjustment (rent adjustment, extension, or quantity modification) before termination. Judges clearly favor solutions that minimize disruption. 3. Defendants focus on three lines of defense: - Timeline counterattack (termination occurred before changes); - Result counterattack (still profitable or losses acceptable); - Risk counterattack (industry policy changes are foreseeable operational risks, e.g., the education and training industry should have anticipated policy supervision). Procedural reminder: The right to terminate due to a change of circumstances is discretionary by the judge rather than automatic. Self-proclaimed termination does not generate statutory termination effects. Unilaterally stopping rent payments and leaving the premises will still be treated as breach of contract - this is the most costly lesson in practice.

IV. Practical suggestions and legal basis

The first step is to conduct a self-check of key elements: time, results, and risk boundaries. These three thresholds must be reviewed first before formulating a strategy. The second step is to quantify evidence: policy documents, operating data, loss estimates, and negotiation records must be compiled and formalized. The third step is to prioritize claims: prioritize modification, terminate default clauses, and leave room for discretion in claim amounts. The fourth step is to ensure procedural compliance: do not suspend payments or withdraw from the process without authorization, and leave termination requests to the discretion of arbitrators. Main legal basis: Article 533 of the Civil Code of the People's Republic of China (implemented in 2021) on "change of circumstances"; Article 32 of the Supreme Court's Interpretation on the Application of the General Provisions of the Contract Chapter of the Civil Code (implemented in 2023); specific applications shall be subject to currently effective regulations.

5. Henglu Law Firm's Advice

The change of circumstances is the "remedy in the hands of the arbitrator": what you need to do is not to declare the termination of the contract, but to present the three factors of "unforeseeable, significant, and manifestly unfair" with evidence so that the arbitrator is willing to intervene. The timeline and the loss account are all the ammunition in such cases. Those involved in disputes over changes in circumstances can resolve them throughBusiness and contract disputes in enterprisesObtain a comprehensive solution for the service, which involves the impact of the epidemic situation. For those related to the special topic of this batch of epidemics, you can refer to it. For those involving the design of contract risks due to policy adjustments, you can also make reference to it.Specialised legal servicesFor reference, the following sections involve the termination of lease contracts and the eviction of tenantsProperty sales and construction projectsFor reference, the settlement and execution of payments after the situation changes can be discussed in the section on platesCreditor's rights and debts, and enforcement cases板块。

VI. Frequently Asked Questions

Q1: If the policy has changed, can I announce the termination of the contract on my own?

No. The termination under changed circumstances requires the court or arbitration institution to make a judgment. Self-termination does not produce the legal effect of termination, and may even be regarded as a breach of contract.

Q2: Is it considered unfair even if I lose money?

It depends on the severity of the situation. Turning a small profit into a loss is a type of commercial risk. However, it may only constitute a breach of contract if continuing to perform the contract would result in huge losses and the purpose of the contract would be thwarted.

Q3: Is it considered unforeseeable if the policy is still in the consultation stage when signing the contract?

It is likely that the publicly released draft for soliciting opinions and the policy trends will undermine the validity of the "unpredictability" argument.

Q4: How to choose between a change of circumstances and force majeure?

The effects of exemption from liability and termination are different in the case of an inability to perform due to force majeure and the case of being able to perform but it being obviously unfair due to a change in circumstances. The determination should be based on the facts of the case.

Q5: Is it necessary to negotiate and consult again?

In practice, it is regarded as a preliminary action. The written negotiation record is an important piece of evidence for litigation or arbitration, and skipping it will weaken the claim.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the interpretation of the law in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

VII. Relevant public cases (for reference only, not handled by our firm)

The following cases are all sourced from the official websites of courts at all levels, judicial authorities, and authoritative media outlets, and are unrelated to the cases handled by our firm. They are provided solely for reference in understanding relevant adjudication rules and do not constitute opinions on specific cases.

[Case Number]The case number has not been made public.
[Trial Court]The People's Court of Anyuan District, Pingxiang City, Jiangxi Province (Ten Typical Cases of the Civil Code of the Supreme People's Court of Jiangxi Province)
[Judicial Summary]The training institution leased a house to operate non-academic children's training, and claimed that the situation had changed due to the impact of the "Double Reduction" policy, so it sued to terminate the lease contract. The court determined that the institution proposed to terminate the contract before the "Double Reduction" policy was issued, and the scope of its business would not necessarily be shut down due to the policy. Therefore, the claim of exemption from liability did not meet the time and result requirements of the change in circumstances, and the court ruled that the institution should share the loss of the deposit according to its fault.
[Source]Jiangxi Legal Network (Jiangxi High Court Releases the Top Ten Typical Cases of the Implementation of the Civil Code by Courts in the Province in 2021) (2022-01)

[Case No.]The case number has not been made public.
[Trial Court]Hunan Court (case of the lease contract dispute between Xiang Hua Real Estate Company and Huamei Cinema)
[Judicial Summary]The cinema rented shops to screen movies. After the pandemic, the cinema was closed for more than half a year and the flow of people was limited. The court held that the pandemic constituted a major change that could not be foreseen by the parties when they signed the contract and did not belong to commercial risks. It would be unfair to continue to perform the original lease contract, which constituted a change of circumstances. According to Article 533 of the Civil Code, the court reduced the rent as appropriate.
[Source]Democray and Legal System Network (The Practice of Implementing the Civil Code under the Guidance of Xi Jinping's Thought on the Rule of Law) (2022)

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

Disclaimer: This article is compiled based on the current effective laws and regulations and public 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.