23/03/20

Force majeure

by Jeroen Villé
Does the Corona crisis qualify as a force majeure situation?


Leeward

"Force majeure" is an unforeseeable event beyond the control of the party invoking it and rendering the performance of a contract temporarily or permanently impossible. In the event of force majeure, the parties are released from their obligations. A measure or a decision of the government that makes the execution of an agreement no longer possible may also qualify as force majeure.

The Corona crisis may, in certain cases, qualify as force majeure, as a result of which a party will be released from its obligations under an agreement. We are thinking of the example where production has to be stopped because of a shortage of labour or as a result of a decision by a government body.

The commitment in question is essential when assessing a situation of force majeure. For example, it is not possible to invoke the Corona crisis to justify or postpone the non-payment of invoices. Indeed, the existence or otherwise of liquid assets is not directly linked to Corona. We refer, inter alia, to the recent Cassation judgement of 28 June 2018, in which the Court states that "financial insolvency, even if it is the result of external circumstances that constitute force majeure for the debtor, does not have the effect of releasing the debtor from his payment obligation".

In these times of crisis, we remain available to advise you.

Leeward

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