Thursday | 23 April | 2020
By Reon Janse van Rensburg
The Covid-19 pandemic created many uncertainties and eventualities – most of which are beyond your control.
Force majeure (French) or vis major (Latin), also known as cas fortuit (French) and casus fortuitus (Latin), literally meaning a “higher power” is defined as a coincidental event or an unavoidable accident that can be attributed to that higher power. As a term used in law, a force majeure clause is usually included in a contract that exempts both parties from liabilities or obligations in terms of the contract in the event of an extraordinary occurrence or circumstances beyond the control of the parties. That could include events such as the Covid-19 pandemic and are described by the term “act of God” or “force majeure”.
Typical examples of cases that would be considered as force majeure include natural disasters and a state of war, or riots.
The World Health Organisation (WHO) declared Covid-19 as a global pandemic and in South Africa, the president has declared the disease a national disaster. Due to the pandemic and the consequences that come with it Covid-19 can be regarded as a force majeure.
Force majeure is recognised in contracts and in common law. Under common law the principle of supervening impossibility of performance applies.
In view of this, most South African companies are in a position to explore force majeure, the merit of which would ultimately be determined by the court system if challenged by the defending party.
Although the concept of force majeure may be applicable within the context of Covid-19 and the lockdown of South Africans, businesses wanting to use the legal principle to avoid contractual obligations should approach the matter with caution and should rather obtain legal advice in this regard.
How is force majeure determined?
If the contract in question does not have a clear and explicit force majeure clause, it is important that parties dealing with force majeure would fully understand the court’s considerations and rulings.
The court may consider the following aspects:
- The nature of the contract
- The relationship between the parties
- The circumstances of the case
- The nature of the impossibility of performance invoked by the defendant.
The law firm Webber Wentzel highlights the six conditions that must be met to invoke force majeure to terminate contractual termination or suspension:
- The impossibility must be objectively impossible.
- It must be absolute opposed to probable.
- It must be absolute as opposed to relative. In other words, if it relates to something that can in general be done, but the one party seeking to escape liability cannot personally perform, such party remains liable in contract.
- The impossibility must be unavoidable by a reasonable person.
- It must not be the fault of either party.
- The mere fact that a disaster or event was foreseeable does not necessarily mean that it ought to have been foreseeable or that it is avoidable by a reasonable person.
Impossibilium nulla obligato est maxim – no one is obliged to do the impossible – is the legal provision that discharges parties from acting because of an unforeseen, uncontrolled event.
In contract law, parties can be given the right to suspend the contract – as opposed to a blatant termination – which makes it possible to commit to the force majeure clause for a given term. When the term lapses, parties can reassess the situation and if the impossibility of performance still exists, the parties have the right to terminate the contract in its entirety.
* All information was correct at the time of publication.