Whether the spread of coronavirus can be perceived as a reason of force majeure

19 March, 2020

Whether the spread of coronavirus can be perceived as a reason of force majeure, preventing or postponing fulfilment of contractual obligations, is interpreted according to specific – each time – circumstances.

Regarding the ability to recognize existence of force majeure, no dispute thereupon, since it has already been clarified that the concept itself presupposes that, the event at dispute or its failure to take place, should be due to “circumstances which are foreign to the person who invokes it, unusual and unforeseen, the consequences of which could not have been avoided despite the diligence shown’.

Furthermore, in case in which an event constitutes force majeure, effects of the latter may last only during a certain period, i.e. during the time which is essentially necessary for someone, who, of course, demonstrates customary diligence to put an end to a crisis independent of his/ her will. ​

The main feature in “force majeure” is that a person, in the usual course of things, cannot foresee such an event, contrary to the random concept that can predicted. Indicative cases of force majeure are war, coup, unpredictable government bans, sudden severe illness (in some cases), or “extreme weather phenomena”.

The contractual definition of a force majeure event includes a list of events not expected at the date of the contract, are beyond the control of the contracting party, are not the result of direct or indirect error, misdemeanor or negligence of the party citing force majeure, and those circumstances prevent or delay the affected party from fulfilling its contractual obligations. ​

Very often, but not always, in the related clauses, we find the “epidemics” or the “pandemics” as facts of force majeure. However in many contracts the epidemic is not predicted as a reason of force majeure. The wording of the clause in question is of importance in order to cover the case of the coronavirus. Therefore, if, despite the absence of “epidemic” or “pandemic” as reason of force majeure, there is a provision of reason of force majeure to be a fact existing beyond the contracting party’s control, then this particular case can be covered.

In this respect, the spread of the coronavirus results in state/government actions as well as decisions by private companies consisting of prohibitions and restrictions. The consequences of such measures affect either directly or indirectly application of trade agreements. ​

Therefore, more than necessary is the provision of a force majeure clause on the grounds of coronavirus, since its spread is in full evolution and its consequences are currently not to be foreseen both in terms of time and impact.