The invocation of force majeure in international commercial contracts during the COVID-19 pandemic

Abstract

The emergence of the coronavirus at the end of 2019 has altered the way we live. As at 17 October 2021 the total number of COVID-19 infections and deaths worldwide stood at 241 318 300 and 4 912 575 respectively. The pandemic has spread to most countries worldwide, subsequently resulting in various countries implementing lockdowns and restrictions to curb the spread of the virus. This led to parties being unable to perform their contractual obligations. Under normal circumstances, in the event of a party failing to perform their contractual obligations, the "innocent party" would be able to rely on remedies, such as specific performance and/or damages. However, when the non-performance is caused by an event such as a pandemic, the party in breach could, under certain circumstances, invoke a special clause called force majeure to relieve it of its obligations. This study establishes the circumstances under which a party to an international commercial contract is able to invoke force majeure when claiming impossibility of performance as a result of the COVID-19 pandemic. The importance of this study is evident to the current COVID-19 pandemic but also to possible future pandemics, epidemics, disasters and qualifiable force majeure events. In achieving the aforementioned, this study consists of a three folded study, which includes scrutinising the South African law of contract, the international law of contract as well as the legal principle of force majeure. The research method used is a literature study. Various primary and secondary sources are used, which includes legislation, case law, textbooks, journal articles and electronic sources. For a party to rely on force majeure the starting point is to determine whether the contract includes such a clause, and thereafter interpret the clause and apply it to the factual circumstances of the case. As is evident from this study, a contractual party will be able to invoke force majeure when claiming impossibility of performance as a result of the COVID-19 pandemic. They must however prove that the contract includes a force majeure clause, that COVID-19 was unforeseeable and unavoidable, that COVID-19 was not the fault of any of the parties and that the

non-performance was not the fault of any of the parties. Furthermore, this study provides a recommendation for the drafting of force majeure clauses, which aims to assist parties in the event of future pandemics and/or when unforeseeable events hinder contractual performance impossible.