Il Sole 24 Ore: Our in-depth analysis of the operativity of the force majeure clause
Il Sole 24 Ore publishes an in-depth analysis of the operativity of the force majeure clause in an emergency situation such as the current one. The article was written by our professionals Nicole Frigo, partner Andersen, and Tatiana Karabanova, senior associate of the Firm, and analyses the concept of exemption from liability for breach of contract both in Italian and international law.
The issue is extremely topical because the spread of the coronavirus and the measures to contain the contagion are causing irregularities and suspensions in the operations of some companies, with the risk of non-fulfilment of the obligations contractually assumed by economic operators.
Force majeure and hardship clauses are exceptions to the basic pacta sunt servanda rule. However, a clear definition of the meaning of both terms in business practice is not always easy, just as it is not always easy to determine their exempting operation. In the Italian legal system, moreover, there is no precise definition of force majeure: there are no rules that deal with it in detail and explicitly.
The Italian legislature, however, has established that liability for breach of contract may be excluded in the event of impossibility and excessive onerousness (concepts contemplated in Articles 1256, 1463 and 1467 of the Civil Code).
Often the parties at contractual level omit the express indication of facts constituting force majeure. Moreover, it is not always easy to foresee socio-economic or health situations which, due to their intrinsic characteristic, are completely unpredictable.
It is, therefore, necessary to establish whether the emergency resulting from the spread of the coronavirus can be considered a situation such as to determine the operation of the exemption from liability clause for the company which finds itself unable to meet its contractual commitments.
The risk of the breach of the obligations contractually assumed by economic operators is, unfortunately, a scenario that impacts on relations between companies at an international level.
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