Who would have said that we would frequently be negotiating the wording of the clause relating to force majeure. In Covid-19 times, this has been a reality.
As established in the Civil Code, «no one shall be liable for events which could not be foreseen, or which, had they been foreseen, were inevitable».
In the force majeure clause, we have been negotiating the inclusion or exclusion of strikes, labour disputes, labour shortages, the impossibility of obtaining raw materials, and transport problems. An attempt has even been made to conflate the issue with increases in the price of raw materials or transport. We must clarify that, whilst it is negotiable for the aforementioned examples to constitute force majeure, price increases are a separate matter which we will deal with later.
We are also still negotiating the inclusion of a paragraph in the force majeure clause relating to Covid-19 (and now also relating to the war in Ukraine). Basically, this paragraph highlights that the parties are aware of the current situation and that this does not prevent the performance and execution of the contract. It may also include that if new circumstances relating to Covid-19 arise, the parties will negotiate in good faith how to adapt to such circumstances without the development of the project suffering delays.
Furthermore, it is equally common for one of the parties to seek the inclusion of an excessive onerousness clause (or ‘hardship’ clause). In the Anglo-Saxon world, this clause is much more widespread. In the example of a supply contract, the supplier will attempt to include the clause and have it provide that if an exceptional circumstance arises which causes excessive onerousness for the supplier, the latter may modify prices in order to continue performing the contract. On many occasions, an understanding is reached that, should such an exceptional circumstance occur, the parties will negotiate in good faith alternative contractual conditions to restore the rights and obligations that the parties assumed when they signed the contract.
In any event, we recommend including these clauses if the contract is subject to the law of a civil law country. If the contract is subject to the law of a common law country, this becomes absolutely essential.