Coronavirus: difficulties to execute your contract?
A brief overview of some possible legal solutions.
1. Force majeure and external cause
A debtor cannot be held liable for the late or improper performance of a contractual obligation if this was caused by an external cause or force majeure. In accordance with articles 1147 and 1148 of the Civil Code.
Force majeure concerns events that occur outside of any demonstrable human action, such as indeed a sudden illness e.g. the coronavirus.
An external cause, on the other hand, concerns actions of individual third parties for whom the contracting party itself is not responsible, such as looting, a strike or a theft.
For each contract, it will have to be ascertained in particular whether it is an event that constitutes an insurmountable obstacle to the fulfilment of the obligation.
If the event does not make fulfilment of the obligation impossible, but only more difficult or costly, there is no question of force majeure.
The impossibility will be assessed according to the criteria of the normally careful and cautious contractor of the same professional category and placed in the same concrete circumstances.
In addition, the debtor will have to prove that the non-performance or late performance of his obligation is not due to his fault.
In accordance with article 1315 of the Civil Code, it will be the debtor who must prove that he has been released from his obligation by force majeure.
If he succeeds in proving this, he will not have to fulfil the promised performance, nor will he be obliged to pay any substitute damages.
In the event of an external cause, the obligation is only cancelled if it is a permanent impediment to the performance of the obligation.
If the hindrance is only temporary, the performance of the obligation is suspended for as long as this hindrance persists. Unless the contract has lost all meaning or effect as a result of that delay.
2. Imprevision theory
This doctrine allows the judge to review a contract when:
- there are reasonably unforeseeable circumstances after the conclusion of the contract;
- which significantly aggravate or complicate the performance of the obligations by one of the parties;
- as a result of which the contractual balance is disturbed.
This could include a sudden and significant devaluation of the currency which could occur, for example, as a result of the corona crisis.
Except in some specific cases defined by law, the theory of imprecision is not accepted in the prevailing Belgian case law and legal doctrine.
However, it is not excluded that force majeure, an external cause as well as the theory of imprevision could play a role in your agreement.
It is therefore highly recommended to consult your lawyer if you believe you can invoke one or more of the aforementioned legal grounds.
Please do not wait too long before taking action, because the other party must of course be correctly informed concerning the matters that would prevent the correct execution of the agreement, temporarily or definitively.
Andreas Verbraeken, Advocaat – Attorney at law
2018 Antwerpen BELGIE