## Facts

- A restaurateur leased premises in a new stock-exchange building for operating a restaurant under a long-term commercial lease executed in May 1929.
- The lease term ran for 15 years, with a high base rent and scheduled rent increases; utilities and certain operating costs were borne separately by the tenant.
- Building completion was delayed, and operations began in January 1931 rather than the planned July 1930 start date; the tenant also rented additional spaces and equipment, increasing total payments.
- After an economic downturn reduced turnover, the tenant requested rent and ancillary-payment reductions in June 1931; the landlord refused.
- In January 1933, the tenant sued seeking (i) judicial modification to a turnover-based rent effective January 1933, (ii) alternatively, a fixed reduced rent, or (iii) alternatively, a declaration of a right to withdraw without compensation.
- The Zurich commercial court dismissed the action; the tenant appealed.

## Issues

1. Whether the doctrine of changed circumstances (clausula rebus sic stantibus) applies to long-term lease contracts and permits a claim for judicial adjustment, not only termination.
2. What threshold of post-contract change and disruption of the exchange of performances justifies judicial modification or dissolution of a lease.
3. Whether a severe economic downturn reducing the tenant’s business profitability, without impairing the premises’ usability, satisfies that threshold.

## Decision

- The appellate court affirmed dismissal of the tenant’s action.
- The court held that changed-circumstances doctrine can apply to leases and may support a suit for judicial adjustment rather than only rescission.
- The court concluded the tenant failed to prove the required level of disruption and inequity to warrant modification or termination.
- The court rejected all requested relief: turnover-based rent rewriting, a reduced fixed rent, and an uncompensated right of withdrawal.

## Legal Principles

- Changed-circumstances relief may be available in continuing contracts, including leases; the remedy can include judicial adjustment of contractual terms as well as dissolution.
- Judicial intervention requires an exceptional disturbance of the equivalence between performance and counter-performance: the disproportionality must be manifest, and the other party’s insistence on the original terms must amount to exploitative, usury-like conduct.
- Statutory rent-reduction mechanisms tied to defects or interference with use do not necessarily preclude hardship doctrine, but hardship relief remains narrowly confined.
- Deterioration in the tenant’s business conditions and profitability generally falls within the tenant’s entrepreneurial risk where the premises remain usable and the landlord’s performance is unchanged.

## Conclusion

The court accepted, as a matter of doctrine, that leases may be judicially adjusted under changed circumstances, but it denied relief because an economic depression reducing profits did not establish a manifest imbalance or exploitative insistence on the original rent terms.


Rogenmoser v. Tiefengrund A.G., BGE 59 II 372 (Switz. Fed. Sup. Ct. 1933)