Force majeure and Coronavirus

Force majeure and Coronavirus

Conventional definition of force majeure
It is important to note that the parties remain free to adjust the definition of force majeure in their contract, specifying what will be expressly considered or not as a case of force majeure by the parties. Reference could be made here to a more general notion, such as “any epidemic affecting the performance of the contract” or a specific virus, such as COVID-19.

Duration of the force majeure event
According to the provisions of article 1218 paragraph 2 of the Civil Code: “If the impediment is temporary, performance of the obligation is suspended unless the resulting delay justifies termination of the contract. If the impediment is definitive, the contract is automatically terminated and the parties are discharged from their obligations”.

In contrast to the Civil Code, which does not provide for a precise time limit to distinguish a temporary impediment from a definitive impediment, force majeure clauses very frequently stipulate a time limit beyond which either party may freely terminate the contract, after a period of negotiation to avoid termination. In view of the above, a force majeure clause should provide for a period of time appropriate to the stakes of the transaction and the interests of the parties before authorising termination of the contract.

If the COVID-19 is likely to constitute a cause of force majeure according to article 1218, it should be considered that certain companies will try to invoke a case of unforeseen circumstances, allowing the parties to renegotiate their contract under the conditions of article 1195 of the Civil Code. We speak of an unforeseeable event only if performance of the obligation has not been made impossible, but only more difficult by the debtor, either because he will obtain in return only a performance whose value will have considerably diminished, or because performance, without being impossible, will require greater effort on his part, and a longer period of time than was envisaged. Unforeseeability is therefore intended to play a preventive role, since the risk of annihilation or revision of the contract by the judge should encourage the parties to negotiate5.

However, it is recalled that the parties may contractually exclude the application of Article 1195 of the Civil Code relating to unforeseen circumstances or may adjust its conditions of application, in particular by adjusting the conditions of renegotiation and recourse to the judge for revision / termination of the contract