The possible qualification of the COVID-19 pandemic as force majeure

The COVID-19 pandemic has had unprecedented global consequences. In France, as from 29 February 2020, several administrative measures were ordered to handle the spread of the pandemic, such as lockdown, curfews, and restrictions of movement beyond a certain perimeter. The last of these restrictions were lifted on 3 May 2021. These circumstances disrupted business relations and caused numerous litigations. We will analyse below whether obligors might invoke force majeure to avoid liability.

Contractual force majeure is defined in Article 1218 of the French Civil Code (FCC) which provides that an event stopping a party from performing its obligations under a contract must meet three conditions to qualify as force majeure. The event must be:

1 beyond the control of the obligor who can no longer perform its obligations

2 reasonably unforeseeable at the time the contract was concluded and

3 irresistible during the performance of the contract - in essence, performance of the contract must be rendered impossible and not just more expensive or complicated. As such, the possibility to ensure performance of the obligations under the contract by implementing appropriate measures is directly opposed to the qualification of a force majeure event.

French case law shows that these conditions are appreciated on a case-by-case basis and that crises cannot be considered as of themselves a force majeure event. For instance, the existence of an epidemic does not necessarily imply the qualification of force majeure, in particular when the disease is not particularly lethal and has consequently not rendered impossible performance under the contract[1].

When questioning whether the COVID-19 pandemic could qualify as force majeure under French law, it appears that if the evolution of this pandemic is most certainly beyond the control of the parties, the conditions of foreseeability and irresistibility vastly depend on the date of conclusion of the contract as well as the date on which the force majeure is examined.

Indeed, if a contract has been concluded mid-March 2020, it might be difficult to consider that the consequences of the COVID-19 pandemic were not reasonably foreseeable.

As regards the condition of irresistibility, it should be highlighted that the operational consequences of the pandemic varied a great deal between the first administrative measures and the following ones, and between the sectors of activity.

With regards to the date on which the condition of irresistibility must be assessed, it was ruled in one of the few decisions dealing with the qualification of the COVID-19 pandemic as force majeure, that it should be assessed on the date on which the obligor prevailed itself of it[2]. In this last case, relating to construction works to be conducted in application of a contract concluded in 2017, the Court dismissed the obligee’s argument that the performance was only rendered more onerous and found that the Covid 19 pandemic constituted a force majeure event in consideration of the lethality of the virus, the administrative measures, the sanitary obligations and the low availability of employees due to the lockdown measures.

Several elements should be borne in mind when trying to assimilate any event to force majeure:

• Force majeure cannot be invoked by the obligee as Article 1218 of the FCC refers to the impossibility of performance of the obligor. This solution has been confirmed by the French Supreme Court, which ruled that it results from Article 1218 of the FCC that an obligee who was not able to benefit from the obligation it was entitled to under the contract could not solicit the resolution of said contract by invoking the occurrence of a force majeure event[3].
• Monetary obligations cannot be affected by a force majeure event, since those obligations are never entirely impossible to perform[4].
• The statutory regime of force majeure is not mandatory and as such it is possible for parties to vary from it by inserting a clause in the contract providing for more restrictive or broader conditions than the ones set out by Article 1218 of the FCC.

 

 

 

[1] Court of Appeal of Basse-Terre, 17 December 2018, n°17/00739 in relation with the chikungunya virus and Court of Appeal of Nancy, 22 November 2010, n°09/00003 for the dengue fever virus.

[2] Commercial Court of Evry, 1 July 2020, n°2020R0092.

[3]Cour de Cassation, 1^re civ., 25 November 2020, n°1921060.

[4]Cour de cassation, 16 September 2014, n°13-20306 and Court of Appeal of Grenoble, 5 November 2020, n°16/04533 for a recent case in relation with the consequences of the Covid 19 pandemic.