# Hardship Clause

Source: https://contracko.com/clause-library/hardship

# Hardship Clause

Allows the contract to be renegotiated when unforeseen events make performance excessively onerous.

## What it is

A hardship clause addresses events that do not prevent performance (so force majeure does not apply) but radically change the economic balance, for example a steep cost surge. It obliges the parties to renegotiate the affected terms in good faith.

## Why it matters

Long contracts are exposed to shocks: energy spikes, currency swings, regulatory change. Without a hardship clause, the burdened party may have no relief short of the high threshold of unforeseen circumstances under BW 6:258.

## How to apply it

- Define the trigger objectively, e.g. a cost change above a stated percentage.
- Impose a duty to renegotiate in good faith within a set timeframe.
- State what happens if renegotiation fails: referral to an expert, adaptation by a court, or termination.
- Confirm performance continues during the renegotiation period.

## Sample wording

> If an event beyond a party's control increases its cost of performance by more than fifteen percent (15%), the parties shall renegotiate the affected terms in good faith to restore the original economic balance.

## Negotiation tips

- • Keep the trigger objective and measurable to avoid disputes over whether it applies.
- • Decide in advance who decides if renegotiation deadlocks, to avoid stalemate.

## Common pitfalls

- • A bare "agree to renegotiate" with no fallback, which courts may treat as non-binding.
- • Confusing hardship with force majeure, leaving cost shocks uncovered.

### How Contracko helps

Contracko lets you search your entire contract portfolio for hardship clauses and their trigger thresholds before a cost shock hits. Its AI analysis highlights whether a fallback mechanism (expert, court adaptation, or termination) is present, and contract tracking flags long-term agreements where a missing or weak hardship clause represents a material gap.

## Legal references

- [BW 6:258 Unforeseen circumstances Dutch law](https://wetten.overheid.nl/BWBR0005289)
- [BW 6:248 Reasonableness and fairness Dutch law](https://wetten.overheid.nl/BWBR0005289)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Manufacturing](https://contracko.com/industries/manufacturing)[Logistics & Distribution](https://contracko.com/industries/logistics)[Construction](https://contracko.com/industries/construction-industry)[Commercial Real Estate](https://contracko.com/industries/commercial-real-estate)[Agriculture & AgriTech](https://contracko.com/industries/agriculture)

## Related clauses

- [Force Majeure Clause](https://contracko.com/clause-library/force-majeure)
- [Price Indexation Clause](https://contracko.com/clause-library/price-indexation)
- [Purchase Obligation / Minimum Take](https://contracko.com/clause-library/purchase-obligation)
- [Minimum Contract Duration](https://contracko.com/clause-library/minimum-contract-duration)

## Related terms

- [Force majeure](https://contracko.com/glossary/force-majeure)
- [Good faith](https://contracko.com/glossary/good-faith)
- [Material adverse change (MAC)](https://contracko.com/glossary/material-adverse-change)

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## Frequently asked questions

Common questions about this clause.

- **Q:** How is hardship different from force majeure?
  **A:** Force majeure makes performance impossible and usually excuses or suspends it; hardship makes it merely far more onerous and triggers renegotiation.

- **Q:** Can a Dutch court adapt a contract for hardship without a clause?
  **A:** Yes, under unforeseen circumstances (BW 6:258), but the bar is high; a contractual hardship clause gives more predictable relief.

- **Q:** Does performance continue during hardship renegotiations?
  **A:** It should, and a well-drafted hardship clause says so explicitly. Suspension of performance during renegotiation would amount to self-help that Dutch law does not automatically permit.

- **Q:** What counts as an objective hardship trigger?
  **A:** A measurable, verifiable threshold such as a cost increase above 15% or an index movement beyond a stated band. Vague formulations like "significant change in circumstances" invite disputes about whether the trigger is met.

- **Q:** Can hardship justify permanently ending the contract?
  **A:** Only if renegotiation fails and the clause provides for termination as a fallback, or if a court invokes BW 6:258. Hardship alone, without a clear exit mechanism, does not entitle a party to walk away.

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