Protection from liability : force majeure events in international contracts

Abstract

Each of the contracting parties are instinctively under the impression that the other party will perform their obligations in terms of the contract faithfully and satisfactorily.1 Despite this assumption, the possibility exists that either contracting party might be unable to comply with its contractual obligations due to force majeure events. Harms2 explains that a force majeure event: Is a circumstance that is unforeseeable and out of the reasonable control of one or both of the parties to a contract and the circumstance makes it objectively impossible for one or both of the parties to perform their obligations under the contract.3 Hutchison4 defines a force majeure event as: An extraordinary circumstance that is beyond someone’s control such as a war, strike, riot, crime, epidemic; or an event that is described by the legal term an act of God, also known as a vis major, such as a hurricane, flood, earthquake, volcanic eruption.5 To answer the question of how parties to an international contract can protect themselves against the effects of a force majeure event, one must consult international trade law, contract law, and private international law. International trade law are the rules and customs which govern trade between countries. Contract law is applicable since an agreement is concluded between the parties for the rendering of goods or services. Contract law will also apply if the parties choose to include a force majeure clause in their agreement. If the parties, choose to not include a force majeure clause then private international law will be applied to determine the proper law of the contract which is: [e]ither the law chosen by the parties or the law with which the contract is most closely connected.6

This mini-dissertation endeavours to explain and provide solutions for parties to an international contract, to protect themselves from the effects of force majeure events.