# Hardship clause

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

# Hardship clause

A clause allowing renegotiation when unforeseen events fundamentally upset the contract's balance.

## Definition

A hardship clause entitles the parties to renegotiate, adjust or terminate a contract when unforeseen circumstances make performance excessively onerous without making it impossible (which would be force majeure). It puts the statutory doctrine of unforeseen circumstances in article 6:258 BW into contractual form; that doctrine allows a court to modify or dissolve a contract where reasonableness and fairness require it. Such clauses are common in long-term supply, energy and construction contracts.

## Example

> When raw-material prices triple unexpectedly, a hardship clause obliges the parties to renegotiate the agreed price in good faith.

## Why this is a business risk

Without a hardship clause, a business locked into a long-term contract at a fixed price has limited legal options if circumstances change drastically: the statutory doctrine of article 6:258 BW is available only in exceptional cases and its outcome is uncertain. Conversely, a poorly drafted hardship clause can be exploited by a party that simply wants a better deal, turning a commercially reasonable agreement into a source of persistent renegotiation pressure. The risk of not having one and the risk of having one that is too broad are both real.

## How to manage it

- Define the trigger precisely: specify the threshold for "excessive onerousness" (for example a percentage cost increase) rather than leaving it to open-ended judgment.
- Set a clear procedure for invoking the clause: notice period, documentation required, and a fixed negotiation window before either party may escalate.
- Include a fallback: if renegotiation fails within the agreed period, specify whether the contract continues unchanged, terminates, or goes to a third-party adjudicator.
- Align the hardship clause with any force majeure and price-revision provisions to avoid overlap or contradictions.

### How Contracko helps

Contracko tracks contract milestones and renewal dates so long-term contracts containing hardship clauses surface before a trigger event makes renegotiation urgent. The AI review layer extracts hardship and price-revision provisions and summarises their trigger conditions, giving your team advance visibility of which contracts carry these obligations.

## Legal references

- [BW 6:258 Dutch Civil Code: unforeseen circumstances 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

[Construction](https://contracko.com/industries/construction-industry)[Renewable Energy](https://contracko.com/industries/renewable-energy)[Manufacturing](https://contracko.com/industries/manufacturing)[Logistics & Distribution](https://contracko.com/industries/logistics)

## Related clauses

- [Hardship Clause](https://contracko.com/clause-library/hardship)
- [Force Majeure Clause](https://contracko.com/clause-library/force-majeure)
- [Price Indexation Clause](https://contracko.com/clause-library/price-indexation)

## Related terms

- [Force majeure](https://contracko.com/glossary/force-majeure)
- [Price revision](https://contracko.com/glossary/price-revision)
- [Renegotiation](https://contracko.com/glossary/renegotiation)
- [Good faith](https://contracko.com/glossary/good-faith)

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## Frequently asked questions

Common questions about this term.

- **Q:** What is the difference between a hardship clause and a force majeure clause?
  **A:** Force majeure applies when performance becomes impossible; hardship applies when performance becomes excessively burdensome but remains possible. The two clauses address different situations and can coexist in the same contract.

- **Q:** Can a party invoke hardship if prices simply rise due to normal market fluctuations?
  **A:** Generally no. A hardship clause typically requires an extraordinary and unforeseeable change in circumstances that fundamentally alters the contract balance. Normal market price movements that a party should have anticipated at signing do not meet this threshold.

- **Q:** Does article 6:258 BW give the same protection as a contractual hardship clause?
  **A:** Article 6:258 BW gives the court power to modify or dissolve a contract on grounds of unforeseen circumstances, but it sets a high bar and the outcome is uncertain. A well-drafted contractual hardship clause provides more predictable rights and a structured process, which is why parties include one expressly.

- **Q:** What happens if renegotiation under a hardship clause fails?
  **A:** It depends on the clause. Some provide for termination after a failed negotiation window, others refer the dispute to an expert or arbitrator for binding adjustment, and some simply revert the contract to its original terms. If the clause is silent on failure, the parties may need to litigate.

- **Q:** Should a hardship clause specify which party bears the burden of proving the trigger conditions?
  **A:** Yes, where possible. Allocating the burden of proof avoids disputes about whether the threshold is met. In the absence of express allocation, the party invoking the clause generally bears the burden of demonstrating the trigger under the general rules of civil procedure.

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