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The Impact of the Coronavirus Crisis on the Analysis and Drafting of Contract Clauses: Force Majeure, Hardship and Deferral of Obligations

Published online by Cambridge University Press:  10 December 2021

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Summary

This contribution analyses whether the coronavirus crisis can lead to the application of the doctrine of force majeure. The different conditions of application of force majeure are discussed (non-accountability, unforeseeability and impossibility), as its effects are not defined clearly by the literature and case law. This contribution gives some suggestions for the drafting of force majeure clauses. Of course, pandemics must be mentioned in the circumstances constituting force majeure. Then, the possibility to find alternatives in case of non-performance must be considered. Finally, a renegotiation of the contract can be incorporated into the force majeure clause. The contribution also analyses the doctrine of unforeseen circumstances and the drafting of hardship clauses. Finally, it mentions the coronavirus principles of the European Law Institute which recommends a renegotiation of the contract following the coronavirus crisis.

INTRODUCTION

Coronavirus has had devastating effects on our economy and the impact of the pandemic on contract law has been as virulent as the coronavirus itself. It is appropriate to introduce this contribution by recalling the milestones of the coronavirus phenomenon in view of the change in circumstances since the outbreak of the virus in Wuhan province, Hubei. On 31 December 2019, the authorities announced for the first-time clustered cases of pneumonia of unknown origin; all 41 infected people had attended the Huanan food market. The virus proceeded to spread throughout China, crippling trade with China. It then spread from China to the rest of the world, but we will not go into detail on the development of the virus itself in this contribution.

Hard-hit Europe has imposed containment measures; these have been taken at the State level. In Belgium, the containment measures were initiated on 13 March 2020. On 17 March, Luxembourg triggered a state of crisis that allowed it to take quick legislative decisions and close all construction sites. Given the scale of the pandemic, these measures have been strengthened, including the closure of many businesses and the introduction of border control. Given the temporary nature of the virus, the pandemic measures were gradually lifted in Wuhan province.

In western Europe, the pandemic was alleviated over the summer. But the crisis registered a second wave and new containment measures were decided in various countries in Europe.

The problems that can arise are manifold, but we will limit ourselves to a few examples.

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Publisher: Intersentia
Print publication year: 2021

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