Covid-19 coronavirus - force majeure, imprévision/hardship and emergency legislation on contracts under French law in light of the Covid-19 pandemic
30 March 2020
The Covid-19 pandemic and its consequences are having a major and sudden impact on economic activities and in particular the conditions in which contracts are being performed.
A multitude of scenarii can be envisaged, such as supply shortage, ill or confined employees, governmental measures adopted in response to the pandemic..., which may affect the performance of ongoing contracts and lead to a potential breach of contractual obligations or make such performance excessively onerous.
Whether a party to a French law governed contract may be exempt from performing its contractual obligations and/or from incurring contractual liability in light of the Covid-19 pandemic will depend on whether it can rely on force majeure. Likewise, the question whether ongoing contracts will have to be adapted to the change of economic circumstances resulting from the current health crisis will depend on the possibility to rely on imprévision/hardship.
This publication addresses the applicable rules on force majeure and imprévision/hardship under French law and the possibility for the parties to derogate from those rules in their contract. It also presents the newly introduced derogatory rules adopted by the French Government in the context of the state of emergency recently declared in France. It ends with a focus on the steps you could consider taking to better protect your business in its current and future contractual dealings.