DOES THE CORONAVIRUS CRISIS EQUAL FORCE MAJEURE ?

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Fauve Bex

Associate

The coronavirus crisis disrupts many businesses and agreements. The question arises as to which conditions must be met to lawfully rely on the force majeure principle under Belgian law and what its consequences are.  

According to Belgian law, force majeure arises when a person cannot perform his/her obligations due to unforeseen events or circumstances. Two conditions must be met to qualify an event as force majeure: (i) it makes impossible the performance of an obligation and (ii) there is the absence of any fault by the debtor of the obligation.

The impossibility of performing a contract refers to an absolutely insurmountable obstacle. In principle, the situation in which the performance of an obligation is merely harder does not constitute force majeure. However, there is a tendency towards a less strict application, accepting force majeure when it is reasonably impossible to perform an obligation in the given circumstances.

Therefore, not just any situation in the present crisis will necessarily constitute force majeure. Where governmental bans, lockdowns and cancellations are in place, force majeure seems obvious. Nevertheless, the party not performing will have to demonstrate that the event constituting force majeure is the actual reason for not performing. Many contracts can probably still be performed. This could, for example, be the case where a service provider is still healthy and able to work from a distance.

The party successfully relying on force majeure will not be held liable for not performing its obligation. The performance of the agreement will be suspended until the force majeure event disappears. If the event lasts long or becomes permanent, then the agreement may be resolved without liability.

The contracting parties are free to agree on which events constitute force majeure and on the consequences of such events. However, this freedom is restricted in some cases, for example in B2C contracts.

Finally, some practical guidelines:

  • Check your agreements on force majeure clauses;
  • Ensure that you collect evidence of the relevant force majeure event and circumstances;
  • Notify the force majeure event to the other party/parties to the contract;
  • Mitigate/limit possible losses;
  • Review the option of renegotiating the agreement or coming to a mutually acceptable arrangement.

Please do not hesitate to contact Fauve Bex, Charlotte Vermeersch or Alexander Hansebout for further information.

The above information is merely intended as comment on relevant issues of Belgian law and is not intended as legal advice. Before taking action or relying on the comments and the information given, please seek specific advice on the matters that are of concern to you.

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