Is it possible not to fulfill a treaty in time of war?

Some businessmen wonder if it is possible not to fulfill their responsibilities under a contract during a war. After all, hostilities, blockades, war and curfews are considered force majeure.

How does force majeure work?

First, force majeure does not relieve you from responsibility and from the performance of duties under the contract

The occurrence of force majeure releases from liability for temporary non-performance or improper performance of obligations under the contract. This means that force majeure can move the terms of the contract and release from penalties for temporary non-compliance of contractual obligations, but at the end of force majeure obligations under the contract must be fulfilled.

Second, there must be a causal link

You may invoke force majeure only if there is a causal link between the inability to perform the terms of the contract and force majeure. For example, you cannot ship the paid goods in due time, because the warehouse with the goods was destroyed due to active hostilities.
If the contract requires the performance of certain types of work and the entrepreneur is located in the territory where there are no hostilities, also, there are no objective obstacles to the performance of obligations, then the referring to force majeure will not work, even if there is a martial law in the country.

Third, much depends on the contract terms

Pay attention if the contract contains a clause about the occurrence of force majeure terms. The contract can contain statements regarding force majeure or not. If there is a clause about force majeure in the contract, it is valid for both parties. In most cases, contracts contain only general rules, that in case of force majeure, the parties are released from liability. But sometimes contracts specify that the party who cannot fulfill its obligations under the contract must notify the other party within a certain period of time or even provide a Chamber of Commerce and Industry certificate.

Why do you need to carefully analyze the terms of your contract?

Because if you fail to comply with these rules, you may miss an opportunity to invoke force majeure. For example, the other party to the contract may refer to the absence of a letter from you about the occurrence of force majeure circumstances and demand to fulfill the obligations within the stipulated time or to pay fines and penalties. In such a situation, the law won't be on your side.
If your contract does not contain a clause on the occurrence of force majeure, the general rules of the Civil Code and the Commercial Code apply. The person who proves that the violation of the terms of the contract was unintentional and caused by force majeure circumstances will be exempt from liability.

Force majeure circumstances do not include

• increase in the exchange rate,
• the inability to fulfill the terms of the contract due to a breach of contract by your counterparty (for example, you have to deliver the goods to counterparty A, for this you have ordered goods from counterparty B. Counterparty B could not deliver the goods to you because of active hostilities in his region. Your obligations to Counterparty A must be fulfilled, and you can not rely on force majeure),
• lack of necessary goods on the market,
• lack of necessary funds of the debtor.

How to prove force majeure?

The occurrence of force majeure is proved by a Chamber of Commerce and Industry certificate. The certificate is granted individually to each entrepreneur or company. This document confirms the urgency of circumstances, their unpredictability and inevitability, and the causal link between the circumstances and the inability to fulfill the terms of the contract.
Since the beginning of the war in Ukraine, the Chamber of Commerce and Industry stopped granting individual certificates and issued a special letter for everyone. But this letter may not protect you in case of dispute, because the letter says nothing about the causal link between the circumstances and the inability to fulfill the terms of the contract.

Force majeure has ended, what to do?

You still need to look at the contract. There can be three options for further developments

• It is necessary to fulfill the terms of the contract. Sometimes the contract specifies the deadline within which the obligation must be fulfilled after the force majeure ends.
• The contract can be cancelled unilaterally if force majeure lasts longer than the terms specified in the contract.
• There is no clarification in the contract. Then the terms of the contract must be fulfilled, or the contract can be terminated by agreement of the parties and the debts forgiven.