Force Majeure and Hardship Clauses as Safe Parachutes in Times of Crisis?
Common contractual clauses put to the acid test
Many companies are currently facing unexpected supply bottlenecks and significantly rising prices from their suppliers Immediately, many companies notify their customers that they have to suspend their delivery obligations due to force majeure or that they can no longer deliver at the agreed prices due to the sudden increase in raw material prices. For these cases, supply contracts often contain corresponding force majeure or hardship clauses, which now have to prove effective in practice. Relying on such provisions, numerous companies feel sufficiently protected against claims for damages in particular. In this context, the examination is usually limited to determining that an unexpected event has occurred which is beyond the control of the respective contracting party. In the following, we will take a closer look at some typical provisions in contracts and their viability in the event of a crisis.
The article analyses the needs for adjustment and formulation of force majeure and hardship clauses by taking common model clauses as examples.
This article was published in "NWB Sanieren" No. 7 dated August 24, 2021, page 211 in German languageLink
Purchase and Distribution schemes, International Sale of Goods, etc.