Home Force majeure in foreign trade

Force majeure in foreign trade

Subject to force majeure is very crucial for Ukrainian entrepreneurs engaged in import or export. Unforeseen, uncontrollable situation does not allow the company to meet its obligations to the client.

An opportunity to prove that the conditions of the contract have been violated as a result of force majeure frees the company from responsibility and the need to compensate for the damage caused. However, to do this (to prove that the resulting situation was force majeure), it is necessary to have a precise definition. But with this some problems arise. It is noteworthy that the Ukrainian legislation there is no clear definition. Neither Civil nor Commercial Code does not provide a precise definition of force majeure. This causes some difficulties in doing business. However, quite a successful formulation can be found in the UN Convention on the International Sale of Goods, composed in 1980, Article 79. The document notes that the company shall not be liable for failure to fulfill obligations, if he proves that any uncontrollable circumstances and it would be unwise expected to take into account such obstacles before the conclusion of the contract or overcome obstacles.

Separately want to note the following: force majeure in the contract prescribe a must. This will protect you in unforeseen circumstances, and the customer will be less reason to make a complaint to the company.

That can be attributed to the circumstances of force majeure?

  1. Force Majeure, which appeared as a result of a natural disaster or extreme climatic conditions (hurricanes, floods, freezing port straits, sea, landslides, earthquakes, epidemic disease, hailstorm, cyclone, drought, etc.).
  2. Unforeseen circumstances that occurred against the will of the signatories to the contract (the strikes of workers, mass uprisings, the threat of military conflict, explosion, fire, acts of terrorism, expropriation, illegal actions of third parties and so on).
  3. The conditions regulated by the state authorities and related disaster.
  4. The circumstances specified in the contract itself.

Full list of force majeure make impossible, as their name suggests, to predict that suddenly emerged an extreme situation is often impossible.

The entrepreneur has to prove that certain conditions prevented fulfill contractual obligations with four counts:

  1. The incident took extraordinary nature and are beyond the control of the company;
  2. unexpected conditions encountered;
  3. a causal link between this fact and the implementation of commitments;
  4. impossibility of direct and alternative execution.

Thus, the occurrence of force majeure frees the businessman from liability and compensation only if their evidence. Adding this section, as force majeure, the sales contract will give us a more complete legal protection and ease of doing business.

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