Contractual Waivers and Economic Balance in Government contracts

Abstract

Ruling 68709 of the Third Section, Subsection B of the Council of State, issued on March 26, 2025, represents a significant advancement in Colombian administrative contract law. The ruling examines the validity of contractual waivers and the retroactive application of unified jurisprudence rulings in disputes arising from government contracts. Specifically, the case focuses on a contractor’s claim for economic imbalance caused by contractual suspensions, in light of agreements where the contractor expressly waived any claims for such cost overruns. The ruling illustrates how the absence of reservations does not automatically prevent the analysis of the claims, arguing that waivers are valid as long as they have not been were imposed as a condition by the state entity. Furthermore, the Council of State reiterates that unified rulings interpret current law and may be applied retroactively to other cases under review. Thus, this decision strengthens legal certainty and confidence in public contracting, while recognizing the importance of good faith and respect for agreements.