Covid-19 and international
business contracts
by Simona Cardillo – Click here and read the author’s biography
Lexant Salary Partner – Law Firm Arnaldi Caimmi and Associates
This article appeared in issue 4/2021 of Elevatori Magazine.
T he Coronavirus is showing its effects on the activity of companies, which, since 2020, have had to cope with production slowdowns, forced temporary closures and have to manage relations with their counterparts, especially cross-border ones, made particularly complicated by the emergency situation.
This study focuses on the latter aspect, i.e. the consequences of the health emergency (and the relevant decisions of the competent authorities) on the ability to fulfil contractual obligations.
In order to confirm whether there are any rights of withdrawal or whether the concept of force majeure can be invoked to justify the impossibility of performing contractual obligations, it will be necessary to examine the agreement between the parties.
International commercial contracts very often include a force majeure clause (also known as the ‘Force Majeure Clause’), which governs cases in which a circumstance beyond the control of the parties makes it impossible for them to perform their contractual obligations (e.g., strikes, natural disasters, wars, etc.). In such cases, the non-performing party shall not be liable.
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It should be noted that this principle is often difficult to apply since, even where the socalled force majeure clause appears, it must be understood whether it can be invoked in relation to the specific case that has occurred, the concept of ‘force majeure’ not being univocal and therefore to be assessed on a case-by-case basis.
So, does the Coronavirus fall within the scope of the Force Majeure Clause? Generally speaking, epidemics and decisions of health authorities, being unforeseeable and supervening phenomena, external to the will of the parties, generally fall within the legal category of force majeure but, once again, reference must be made to the specific agreement and the law applicable to it.
