Almost all foreign trade contracts contain a condition that allows you to postpone the term of performance of the contract or even exempts the parties from full or partial fulfillment of obligations under it in the event of circumstances beyond the control of the parties that prevent the performance of the contract after the conclusion of the contract. These circumstances are usually called “unforeseen”, “force majeure” or “force majeure circumstances”. They can be divided into 2 categories:
Long-term circumstances usually include: export and import bans; war; blockade; currency restrictions or other measures of the government and government bodies. Short-term circumstances include: fire, flood, earthquake and other natural disasters, closure of sea straits, etc.
In the contract, it is necessary to accurately determine the force majeure circumstances in advance, otherwise these circumstances may be interpreted in accordance with the trade customs of the country of performance of the contract. Usually, the seller seeks to include as many circumstances as possible in the force majeure clause.
In the event of force majeure circumstances, the term of performance of the contract is postponed in proportion to the time of the circumstances or their consequences. If such circumstances continue longer than the period agreed in the contract, then each of the parties has the right to refuse further performance of its obligations under the contract, in which case neither party will be entitled to compensation by the other party for possible damages.
The duration of the validity of force majeure circumstances is determined taking into account the period of performance of the contract, the nature of the goods, trade customs (for example, in contracts for perishable goods, such a period is usually not more than
15 – 30 days, for equipment – from 3 to 6 months). The party for whom the impossibility of fulfilling obligations under the contract due to force majeure circumstances has been created must immediately notify the other party in writing of their occurrence, as well as their termination. In the contract, the parties indicate the name of the organization (usually the chamber of commerce) indicating the occurrence and duration of unforeseen circumstances by issuing a certificate.