Introduction

A new category of contracts emerged as legal relations evolved – public procurement contracts, characterized by a structural imbalance between the parties. The first modern regulations in this field appeared in the United States through Congressional Acts of 1792 and 1809, which established public procedures for tendering in acquisitions related to postal, naval, and military services. However, the true development of the legal framework governing public procurement contracts was driven by France, through the Imperial Decree of 1806 and the subsequent Public Procurement Code of 1928.

In its contemporary form, the public procurement contract was shaped by European directives, starting with Directive 71/305/EEC, which defined its legal structure and underlying principles. This type of contract is distinguished by the dominant position of the public authority, resulting from both the unilateral process of contract formation and the prerogatives it holds during execution.

The administrative nature of the contract gives the public authority a position of power, expressed through several specific legal mechanisms. During the award phase, the authority unilaterally determines the contract’s object, maximum value, and execution conditions, thereby significantly limiting the contractor’s ability to negotiate. Although bidders may propose changes, the law allows the authority to reject any modification deemed unfavorable. During contract performance, the authority retains the right to terminate the contract at its discretion, reinforcing the contractual imbalance. Finally, at the termination stage, through the issuance of the performance assessment document evaluating the contractor’s fulfillment of obligations, the authority possesses a final lever of influence – since such a document can affect the contractor’s access to future procurement procedures.

 Definition of contractual balance principle

An analysis of legal scholarship shows that the idea of contractual balance has been a matter of academic concern in Romanian doctrine even before the entry into force of the current Civil Code. Despite the absence of an explicit legal framework, jurists were already exploring the causes and manifestations of imbalance between contracting parties. Drawing inspiration from French legal thought, Romanian doctrine adopted several criteria for identifying contractual imbalance: reciprocity, commutativity, equivalence, and proportionality[1].

The criterion of reciprocity requires that each party provide a counter-performance that justifies the existence and validity of the other party’s obligation. In the performance phase, reciprocity also legitimizes the use of mechanisms such as the exceptio non adimpleti contractus (the right to withhold performance when the other party defaults). The criterion of commutativity, although related, does not focus on the monetary value of performances, but rather on their existence as mutually recognized obligations. In a commutative contract, both parties must be aware of what they give and what they receive. Thus, a clause allowing one party to unilaterally alter the contract price undermines commutativity. These two criteria -reciprocity and commutativity – represent the formal, quantitative dimension of contractual balance. However, their mere presence does not ensure fairness, which requires additional qualitative criteria: equivalence and proportionality.

The criterion of equivalence assesses whether the rights and obligations of the parties are of comparable, though not identical, value. It has both an economic dimension – relating to the financial value of performances – and a legal dimension – relating to the nature of obligations, whether principal or accessory, obligations of means or of result. Imbalance may thus arise not only from financial disparity but also from asymmetrical legal burdens. The criterion of proportionality, on the other hand, applies when a precise economic valuation is not possible. It evaluates the contract as a whole, taking into account the purpose pursued by the parties, to determine whether an apparently unbalanced clause actually contributes to maintaining the overall equilibrium. Therefore, proportionality requires a teleological interpretation of the contract, analyzing the rationale and function of each clause.

Modern contract law has shifted its focus from the formal validity of agreements toward their effective and equitable performance. The role of courts has evolved beyond literal enforcement of contracts, granting judges the authority to adjust excessive clauses or adapt contracts that have become unbalanced. In this context, contractual balance has emerged as a guiding principle ensuring both the stability of contractual relations and their alignment with the broader principle of equivalence that pervades private law.

The purpose of contractual balance is not to achieve mathematical equality between parties, but to prevent and remedy situations of disproportionate imbalance. Judicial intervention is therefore exceptional, justified only when the inequality is manifest and threatens the fairness of the agreement – constituting an exception to the principle of pacta sunt servanda.

In Romanian legal doctrine, contractual balance is closely linked with equity and good faith, forming the foundation of contractual solidarism. This theory emphasizes cooperation and mutual respect between contracting parties, shifting attention from individual autonomy to the protection of shared interests. Within this framework, the principle of equivalence of performances embodies the practical application of commutative justice – a justice that seeks fair distribution of benefits and burdens rather than arithmetical equality[2].

The 2011 Romanian Civil Code marked a decisive shift from the paradigm of absolute autonomy of will to that of contractual balance, which has become a central principle of modern contract law. From it derive three major rules: (i) the limitation of excess in contracts, (ii) the prohibition of abusive exercise of contractual rights, and (iii) the performance of obligations in good faith. These principles do not undermine freedom of contract but rather complement it by imposing ethical and equitable standards of conduct, particularly where there is a disparity in bargaining power.

Excess in contracts represents a specific manifestation of imbalance, functioning as a mechanism for protecting the weaker party. It may be identified either through the objective effects of certain clauses or through the application of fairness standards to concrete situations. Even though Romanian law does not explicitly sanction contractual excess, it can be corrected through doctrines such as lesion, nominal consideration, or reduction of obligations. Similarly, abuse of contractual power may be sanctioned on the basis of equity, even in the absence of explicit statutory provisions.

Consequently, the principle of contractual balance integrates legal, economic, and moral dimensions of the contractual relationship. It transforms the contract from a mere formal instrument of exchange into a dynamic institution designed to function equitably and sustainably. Through it, private law seeks not only to preserve contractual freedom but also to ensure that such freedom operates within the limits of fairness and mutual consideration between the parties.

Aplications of contractual balance principle in public procurement contracts

At the formation of the contract

According to Art. 137(3)(b) of Government Decision 395/2016, a bid is considered non-compliant if it contains proposals to modify the contractual clauses established by the contracting authority in the tender documentation, which are clearly disadvantageous for the contracting authority, and the bidder, although informed of this situation, refuses to waive the respective clauses.

In practice, any proposal made by a bidder to modify the contract model may be interpreted as being disadvantageous to the contracting authority, because, naturally, the bidder will make proposals that provide them with greater protection against contractual risks or advance their own interests. This is because, usually, the contract model published by the contracting authority in the tender documentation is drafted primarily to protect and promote the authority’s own interests.

In this context, our view is that the principle of contractual balance, with all its features and implications, operates as an interpretative tool for the notion of “proposals clearly disadvantageous to the contracting authority.” A modification proposal that corrects a dominant contract and allocates specific risks of the contracting authority to the bidder – although apparently disadvantageous to the contracting authority – should not be considered harmful if the proposal serves to make the contract functional, enabling it to be properly executed and achieving the expected social benefit. Under the principle of contractual balance, such a proposal is not a disadvantage to the authority, but rather an advantage to the contract, and both parties should aim at establishing a functional contract structure.

”The contract should be fair and balanced in terms of risk allocation. In particular, clauses or contractual conditions that transfer risks to the contractor which are beyond their control should be avoided, as these may limit the number of bids, significantly impact the price, or lead to contractual disputes. The tender documentation, including its annexes, as well as the winning bidder’s proposals responding to the requirements, must be incorporated into the final version of the contract under which it is executed.”[3]

A contract that is unbalanced, even if it places one party in a position of total dominance, becomes unrealistic and incapable of execution, which ultimately harms both parties because the contract will not be successfully completed. Therefore, modification proposals to the contract model made during the bidding phase, which are practical expressions of reciprocity, commutativity, equivalence, and proportionality promoted by contractual balance, should be considered proposals in the interest of the contract and, implicitly, in the interest of the authority and the social benefits it seeks through the award of the contract. Such proposals are not disadvantageous to the contracting authority, but rather ensure the necessary economic and legal balance – through the fair allocation of risks – to secure cash flow and create conditions conducive to the successful completion of the contract. 

Contractual balance and the modification of contracts

According to Art. 221 Law 98/2016,  the modification of a public procurement contract is not permitted if it alters the economic balance of the public procurement contract/framework agreement in favor of the contractor in a way that was not provided for in the original public procurement contract/framework agreement.

A case of substantial modification concerns a change in the economic balance of the contract in favor of the other party, in a way that was not provided for in the initial contract. From a grammatical perspective, if a modification would favor the contracting authority, it would not be considered substantial and could be carried out without organizing a new procedure. The assessment must take into account the bargaining power of the private party and the socio-economic context in which the modification is made. However, the concept of “economic balance” is not explicitly defined in the Public Procurement Law. At first glance, it can be interpreted as referring to the modification of the financial conditions compared to the initial offer or the contract already signed. More broadly, it could include the entire structure of the public procurement contract. According to foreign doctrine, the assessment of economic equilibrium must analyze the entire economics of the modification. For example, if a change provides access to a bonus or reduces the risk of penalties, these effects must be taken into account.

Over time, the literature has highlighted different perspectives on the identification of excessive imbalance in contracts, ranging from narrow to more comprehensive approaches. Some views take into account both the objective aspect of the contract and the subjective impact on the parties, focusing either on the value imbalance of the affected performance, or on the general economic reconfiguration of the whole contract.

The determination of the imbalance can be analysed from the perspective of each party individually or of both parties simultaneously, which is the option that most accurately reflects the essence of contractual equilibrium: it is not the isolated perception of one party that matters, but the overall picture of the contract, taking into account the losses and gains generated in the assets of both parties as a result of the changes.

For example, the debtor’s insolvency, which prevents further performance of the obligations because of lack of financial resources, does not constitute an excessive imbalance within the meaning of the contract, but is covered by the special rules on insolvency. In such situations, the principle of the competing mass of creditors applies, so that all contracts of the insolvent debtor are treated equally, and it is not possible to rebalance an individual contract to the detriment of other creditors.

Special clauses for automatic revision of the contract

This gives the entrepreneur real protection against commercial risks caused by the possibility of price increases for raw materials and labour.

The price revision clause simply involves adjusting the price according to one or more criteria[4].

These kinds of clauses are special applications of the contractual balance principle, whereby the parties anticipate that certain events, which usually occur in the market or within the scope of the contract, can intervene and affect the proper performance of the contract. For this reason, they insert revision clauses into the contract from the outset to govern how the contract shall be adapted if these circumstances occur. This makes public procurement contracts more predictable and stable, and ensures a proper legal and economic balance between the parties’ expectations, as a failed contract will usually fail to achieve the social benefits aimed for in the procurement phase.

Conclusion

The principle of contractual balance plays a fundamental role in public procurement contracts, ensuring that agreements are not only legally valid but also economically and socially functional. Given the inherent structural imbalance between public authorities and contractors, contractual balance serves as a corrective and interpretative tool, guiding both the formation and execution of contracts. It ensures that risk allocation is fair, modifications do not unjustly favor one party, and the contract remains capable of achieving its intended social and economic objectives.

By integrating formal criteria such as reciprocity and commutativity with qualitative measures like equivalence and proportionality, contractual balance transforms public procurement contracts from rigid instruments of unilateral authority into dynamic agreements that promote fairness, sustainability, and the public interest. Mechanisms such as price revision clauses or adjustments to contract models exemplify practical applications of this principle, safeguarding both parties against unforeseen risks and enabling the successful completion of contracts.

Ultimately, contractual balance does not undermine the autonomy of contracting parties but reinforces it by embedding ethical, equitable, and pragmatic standards into the framework of public procurement. In doing so, it ensures that these contracts serve their broader purpose: the delivery of effective, efficient, and socially beneficial public services.

---

[1] E. Mihai, Abusive Clauses or the Consumerist Avatar of Contractual Balance, Pandectele Romane, no. 10/2007.
[2] A. Almășan, Civil law. The Dynamics of Obligations, Hamangiu, 2018, p. 172.
[3] European Commission, Public Procurement – Guidance for Public Procurement Officers on Avoiding the Most Common Errors in Projects Funded by European Structural and Investment Funds, 2015, p. 35.
[4] A.D. GOH, Post-price calculation vs. price revision clauses in international commercial contracts, Dreptul, no. 5/ 2022.

---

Av. Drd. Eugen Sârbu, Managing partner Sârbu Partners

* An earlier version of this paper was presented at the 21st Administration and Public Management International Conference, “Transforming Public Administration in Times of Multiple Crises,” held in Bucharest on October 24–25, 2025, and organized by the Bucharest University of Economic Studies (ASE Bucuresti).