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THEORY OF UNFORESEEABILITY IN GOVERNMENT CONTRACTING

As a result of the events generated in the country in relation to COVID-19, many state contracts have been affected in their economic equilibrium, which must be maintained throughout the execution of the contract, preserving the rigor of the services provided at the beginning of the contract. Therefore, there are cases in which economic conditions are altered in an exceptional manner, which is why we will speak of the theory of unforeseeability, for those cases in which the execution of the contract is made more burdensome, but not impossible to comply with.

The theory of unforeseeability is typical of bilateral contracts of successive execution, it occurs when there are extraordinary and unforeseeable circumstances that affect the economy of the contract, these circumstances are subsequent to the birth of the contract and do not prevent its execution, but they do represent for the contractor, that the fulfillment of the obligations at its charge become excessively onerous, putting it in a situation of serious patrimonial loss, which leads to a review of the contract by the contracting entity, in order to reestablish the economic equilibrium.
It should be noted that, in order for the theory of unforeseeability to operate, a series of conditions must be met, as described below:

  1. It must be a successive performance contract.
  2. We must be in the presence of a future event, impossible to foresee at the time of the conclusion of the contract by any of the parties.
  3. It must be an event that seriously affects the economic equilibrium of the contract; it is not simply the disappearance of the economic benefit.
  4. The facts must be alien to the parties’ intention and the parties should have done everything possible to overcome it, showing diligence without exposing themselves to it.
  5. Finally, the unforeseen and exceptional event must be temporary, since otherwise, we would be talking about a force majeure that could give the contractor grounds to request the termination of the contract.

An event such as the one described above would lead to the review of the contract and the reestablishment of the economic equilibrium in the terms of numeral 1 of Article 5 of Law 80 of 1993, which establishes that due to the occurrence of unforeseen situations that are not attributable to the contractor, the contractor shall have the right, upon request, to have the administration reestablish the equilibrium of the economic equation of the contract to a point of no loss. Finally, it is important to emphasize that we are not facing a reparation of damages, because there is no imputation of any damage, what exists is a compensation limited to the losses suffered, without recognizing the profit lost.
 
If you require advice or related information, please contact us: www.cuadrolegal.com / gianna.negrete@cuadrolegal.com

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