The Hardship Clause as a form of Mitigation of Information Asymmetry in International Contracts

Gabriela Wallau Rodrigues / Demétrio Beck da Silva Giannakos

Keywords

Hardship Clause; Asymmetric Information; International Contracts.

Abstract

The text analyses hardship clauses from a perspective of Law & Economics, especially in light of issues concerning asymmetric information. Once the main characteristics and the legal grounds of such clause are defined, the paper focuses on the role played by it on mitigating information gaps between parties on relational contracts, precisely those involving international relations. As a conclusion, hardship clause is identified as an efficient mechanism of disclosure between parties, therefore contributing to contract maintenance and transactional costs reduction.