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LEE & LI Bulletin - April 2019

Summary
The peremption for the right of formation under the principle of circumstances change is two-years In the litigation of construction dispute, it is common that the contractor applies the court to increase or reduce the contractual payment according to the principle of circumstances change prescribed in Article 227-2 of the Civil Code. In judicial practice, the courts recognized that such kind of litigation is a lawsuit of formation. After the formation judgment for increasing the contractual payment has become final and irrevocable, the right of claim for increased amount of the contractual payment has become exercisable. The Supreme Court rules that the extinctive prescription of such right of claim under Article 227-2 of the Civil Code shall be the same as that of the right of claim arising from the contract. If the right of claim arising from the contract is a right of claim for “remuneration of undertaker”, the extinctive prescription of the right of claim for increased amount of the contractual payment is also two-years. As a consequence, the two-year extinctive prescription of such right starts from the moment when the judgment of formation lawsuit has become final and irrevocable.....More
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