| Title |
Proposals for Improving the Compensation System for Contract Termination Due to Changed Circumstances |
| Authors |
이경태(Lee, Kyung-Tae) ; 김주형(Kim, Ju-Hyung) |
| DOI |
https://doi.org/10.5659/JAIK.2025.41.3.355 |
| Keywords |
Changed Circumstances; Contract Termination; Compensation system; Indirect Termination Costs; Interdependent Research Methodology |
| Abstract |
Social changes and sharp price increases caused by force majeure events such as COVID-19 and wars have significantly impacted
construction contracts, leading to increasing financial losses and disputes. In this context, the "principle of changed circumstances" outlined in
Article 45 of the General Conditions of the Construction Contract has emerged as a basis for contract termination. However, concerns remain
regarding the clarity of its legal interpretation and the scope of compensation. This study employs an interdependent methodology and case
analysis to compare domestic and international laws and precedents, proposing revisions to construction contract regulations based on expert
reviews. The findings reveal that while the application of the principle of changed circumstances remains cautious in both domestic and
international legal frameworks, efforts to reduce disputes and enhance fairness among contracting parties are expanding. Notably, significant
discrepancies were identified in the interpretation of indirect costs incurred during project suspension. However, it was found that expanded
compensation for costs such as site management and labor expenses is feasible. Based on these findings, this study proposes clarifying
conditions for changed circumstances and compensation criteria during the early stages of contracts to prevent disputes and enhance equity.
These proposed improvements are expected to strengthen shared responsibilities between clients and contractors and contribute to the
sustainability of the construction ecosystem. |