Coronavirus, Force Majeure and Agreements

• Force Majeure is an unpredictable situation not dependent on the parties, occurring after the agreement has been made and preventing the fulfilment of a contractual obligation.
• Coronavirus (COVID-19) can be considered as Force Majeure situation, if the virus prevents the fulfilment of certain contractual obligations – i.e. the reason is solely coronavirus.
• A situation where the fulfilment of a contractual obligation becomes financially difficult is principally not a Force Majeure situation. Therefore, a liquidity crisis caused by the coronavirus may not, as such, prevent the fulfilment of a contractual obligation in a way that a Force Majeure situation could be claimed to exist.
• In general, Force Majeure clauses are often included in the agreements, but even without a specific clause, it may be possible to refer to a Force Majeure situation based on general legal principles applied, among others, in Finland.
• Contracting party referring to a Force Majeure situation must inform the other party about the situation and its termination without delay.
• During the Force Majeure situation, the other party cannot demand timely fulfilment of a contractual obligation which has become impossible due to it.
• The party referring to Force Majeure situation must, nevertheless, minimise the effects of the identified obstacles in fulfilment of the contractual obligations.
• Terminating the agreement in a Force Majeure situation must be carefully considered, taking into account, among others, the situation at hand, the terms of the specific agreement and the loyalty obligation of the parties.

Exceptional circumstances may entitle exceptional actions. Our specialists will help you to find out how to act in different contractual situations in the world overturned by the coronavirus.