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Contracts and force majeure

AMATIN AG, 2020

It is in the nature of things that not all eventualities can be foreseen when drawing up a contract. This applies in particular to events triggered by force majeur which lie outside the (immediate) sphere of human influence. These include natural disasters such as earthquakes, landslides, volcanic eruptions or pandemics. How do such events influence existing contractual relationships?

Force majeure can be a reason why one of the parties to a contract is unable to provide its services. If, for example, the garage of the car seller in which a previously sold classic car was stored burns down as a result of a lightning strike, the seller is released from his obligation to perform in accordance with the general statutory provisions. However, this does not apply if one of the contracting parties is only temporarily unable to fulfil the contract. In this case it is in default. If the debtor – e.g. the car seller – is also responsible for the fact that he did not place the classic car in front of the buyer’s parking garage at the promised time, he must also be liable for events which – like the lightning strike – represent force majeure. He now owes damages and must compensate for any financial disadvantages caused by the delay. Only if it can be proven that the event would have occurred at the contractual partner’s premises even if delivery had been made on time, the obligation to pay compensation shall not apply.

The creditor is entitled to decide in the case of bilateral contracts in the event of default by the contractual partner: He can choose whether he continues to insist on the fulfilment of the contract or whether he waives the consideration. An example: During a pandemic, an industrial company cannot deliver the machine promised to its contractual partner because its supplier is unable to deliver the necessary components due to an officially ordered closure of the plant. In the present case, the buyer of the machine may decide how to proceed. However, before he may exercise his right to choose, he must grant the industrial company a grace period for the fulfilment of his contractual obligation and this grace period must expire without success. Only in certain cases can the setting of a period of grace be waived.

In the event of an event of force majeure, it is in any case advisable to inform the contractual partner immediately. At the same time, he should be informed whether the performance of the owed service can still be expected.

It is advisable to consider events of force majeure already when drafting the contract. In your contracts/AGBs, a regime should be defined how to proceed in case of force majeure and what influence it has on the mutual performance obligations. Accordingly, it is advisable to include a so-called force majeure clause in your contracts.

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Martin BoosAttorney at Law, Partner

martin.boos@amatin.ch
+41 61 202 91 91

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Roman Kälin-BurgyAttorney at Law, Partner

roman.kaelin-burgy@amatin.ch
+41 61 202 91 91

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