Can you invoke force majeure in your contracts due to the current health crisis? We thought it would be interesting to look into the subject.
Indeed, the measures taken by the various governments to protect their nationals in this situation of world crisis entail impediments in the execution of the contracts in progress in the companies.
Force majeure appears to be the preferred means to suspend or even end, if necessary, the execution of their contract.
Can COVID-19 be legally considered force majeure?
According to the Civil Code, the event of force majeure is characterized by 3 cumulative criteria, namely:
- exteriority: the event is beyond the control of the obligor
- unpredictability: it could not have been reasonably foreseen at the time the contract was concluded
- irresistibility: its effects cannot be avoided by appropriate measures.
It seems obvious that an epidemic is beyond the control of people, so the criterion of exteriority is met.
The unpredictability criterion would be fulfilled for any contract signed prior to the declaration of the epidemic in China. It is more uncertain after this date since the arrival of the epidemic in France was not unpredictable. It all depends on the departure date taken into account and the judge’s interpretation in the event of a dispute.
The most uncertain criterion is irresistibility. Were alternatives available? Could we use alternative networks or alternative sources of supply? etc.
When the debtor is a legal person, which by definition cannot be affected by the COVID-19, it must then be demonstrated that it was prevented from providing the contractual service.
The drafting of the contract, especially the force majeure clause but also the general conditions of sale or service are also very important and it should be provided in particular that the contractual obligations may cease in case of such an event.
It is therefore possible to suspend its contractual obligations on the basis of force majeure, here the COVID-19 crisis, however the positive or negative outcome strongly depends on the specific case.
Renegotiation of the contract may also be an option in the event that an unforeseeable change in circumstances at the signature of the contract makes its execution too onerous.
Again, the terms of each contract will make it possible or not.