How Can Enterprises Cope With The Contract Failure Due To Epidemic Situation?

The first paragraph of article seventy-ninth of the United Nations Convention on Contracts for the international sale of goods stipulates that the parties concerned are irresponsible if they fail to perform their obligations. If he can prove that such non-compliance is due to some obstacle that he can not control, there is no reason to expect him to take into account or avoid or overcome his or her consequences in concluding a contract; the provisions of article 117th of the general principles of international commercial contracts provide that if a party fails to perform, it is caused by obstacles not controlled by him, and when the contract fails to reasonably anticipate that the party can take into account the obstacle or avoid or overcome the obstacle or consequences, the non performing party shall be exempted from liability. The 117th provision of the contract law stipulates that force majeure means unforeseen, unavoidable and insurmountable objectivity. The far-reaching social impact of the new crown disease is unforeseeable, unavoidable and insurmountable objective events for enterprises. Therefore, it is legal and practical to characterize it as an event of force majeure. However, to refine the suitability of the main contents of each contract, it is necessary to consider the laws and regulations one by one according to the logical relationship between the contract and the related facts.

The 118th provision of the contract law provides that: "if a party fails to perform the contract due to force majeure, it shall notify the other party in time to mitigate the losses that may be caused to the other party and to provide proof within a reasonable time". The statute of the China Council for the promotion of international trade, which is approved by the State Council, stipulates that "the duties of the China Council for the promotion of international trade include the proof of force majeure".

In the light of the relevant laws and the provisions of the constitution of the China Council for the promotion of trade, the following guidelines are put forward in the light of the specific circumstances of the commercial certification business and the contract covered by the epidemic.

One

Common contract categories affected by the new crown epidemic

(1) a sales contract, that is, a seller's contract to transfer the ownership of the subject matter to the buyer and the buyer to pay the price.

(two) contract of work, that is, the contractor completes the work according to the requirements of the ordering party, delivers the results of the work, and contracts for remuneration, including processing, fixing, repairing, copying, testing and testing.

(three) a construction contract, that is, a contractor's contract for the construction of the project and the employer to pay the price, including the project investigation, design and construction contract.

(four) a contract of carriage, that is, a contract whereby the carrier delivers the goods from the starting point to the agreed place, the consignor or the consignee pays the fare or the transportation cost.

(five) service contracts, such as performance contracts, have strong personal dependence.

The government has adopted special administrative actions such as holiday extension, postponed reemployment, "closed city", traffic control, directive production transfer, anti epidemic materials, requisition of plant equipment, or related personnel due to the isolation of the epidemic situation. The contract, such as the obligor, the contractor, the contractor and the carrier, fulfilled the contract on time, resulting in the failure to perform the contract.

Two

The force majeure elements shall be applied to the performance of the contract.

No matter what kind of failure to perform, if the existence of a causal relationship between force majeure and non performance is blocked, the application of force majeure exemption clause should be excluded. The cause and effect relationship between force majeure and non performing duties should have the closest nature and uniqueness.

(1) time points.

The impact of the new crown epidemic must be established after the establishment of the contract and before the completion time of the contract, that is, the performance period of the contract. All kinds of government restrictive measures, such as the time of occurrence of epidemics and the impact on enterprises, must be notified by the relevant local authorities.

(two) causality.

There must be a legal causal relationship between the failure of the contract to perform on schedule and the impact of the new crown epidemic. If there is a new crown outbreak in the performance of the contract, the force majeure can not be applied if the epidemic situation can not lead to the failure of the contract obligor to perform on time. For example, although the new crown epidemic is an infectious disease, it can be prevented from being cured. If it is prevented properly, it will not be infected. If the government of the contract obligor does not issue any restrictive measures such as isolation, it is not applicable to force majeure and no exemption.

Three

Easily confused into force majeure contract behavior.

(1) delay in performance of the contract.

If the new crown is affected, the contract obligor has delayed the execution of the contract and cannot be applied to force majeure. The first paragraph of article 117th of the contract law stipulates that a force majeure after a delay in performance of a contract shall not be exempted from liability.

(two) there is a fault in the contract.

In spite of the new crown epidemic situation, due to the fault of the contract obligor, the contract can not be performed normally. If the product quality problem and the contract obligor slack off, the contract obligor shall bear the corresponding legal liability and can not apply the force majeure.

Four

Enterprises shall apply for force majeure factual proof.

The following supporting materials shall be provided in accordance with the contract and the specific circumstances.

Application for force majeure has proved that enterprises should submit corresponding supporting materials according to the specific circumstances according to the requirements of the issuing organs, so as to produce corresponding testimonies. The core principle of testimony: to present facts based on facts, and to find out the source of the facts stated in the official supporting materials provided by the enterprises. The testimony is concise and clear, without reasoning. The key supporting materials can be considered from the following aspects:

(1) the contract can not be fulfilled on schedule because of the implementation of the government directive, the factory's production of the new crown virus and so on. We need to provide relevant supporting materials such as the government's request for transfer orders.

(two) because of the new crown epidemic situation, enterprises implement government shutdown, isolation, and "city closure" and other measures, resulting in the contract can not be fulfilled on schedule. Relevant supporting materials such as government notices should be provided.

(three) because of the new crown epidemic situation, the government has informed the holidays to extend and postpone the resumption of work, resulting in the failure of the contract to be fulfilled on time. It should be noted that the announcement of the Spring Festival holiday by the State Council is a temporary measure and is not an extension of statutory holidays. Shanghai's postponed resumption of work does not include some special industries, such enterprises still need to go to work normally, whether this situation can be identified as force majeure remains to be discussed. The above conditions need to be provided by government related agencies such as extension of holidays, extension of work and other notice.

(four) if a logistics company stops or is transferred by the government, the goods will not be delivered on time, resulting in a failure to fulfill the contract on time. It is necessary to submit the contract between the enterprise and the logistics company, the relevant supporting materials such as the downtime of the logistics company, and the proof of the ordered transfer.

(five) construction contracts, service contracts and other strong personal dependence, such as staff members of the hospital due to new crown infection, hospitalization, isolation or traffic delays, interruptions, resulting in the contract can not be performed on time. Relevant supporting materials such as hospitalization certificate, diagnosis certificate, extension of sea, land and air, delay and cancellation should be provided.

(six) the new crown situation caused by other contracts is enough to cause the contract to fail to meet the deadline. Submit corresponding supporting materials according to specific circumstances.

Five

Use legal guidelines to remind relevant enterprises to do the following four points.

So as to maximize the help of enterprises to reduce losses.

Use legal guidelines to remind relevant enterprises to do the following four points, so as to maximize the help of enterprises to reduce losses.

The legal consequence of force majeure is not, of course, a total exemption from liability for breach of contract. In terms of responsibility sharing, each country's practice is to investigate whether the contract obligor should take positive measures to minimize or avoid loss expansion based on the principle of good faith, so as to determine the corresponding responsibility sharing.

(1) timely notification of obligations.

If the contract holder fails to fulfill the contract on time, he must perform the duty of timely notification after the occurrence of the new crown epidemic situation, and submit relevant evidence after that, so that the other party can have time to take measures to avoid losses as far as possible. Refer to the 118th provision of the contract law: "if a party fails to perform the contract due to force majeure, it shall notify the other party in time to mitigate the losses that may be caused to the other party, and shall provide proof within a reasonable time." The third paragraph of article 7.1.7 of the general principles of international commercial contracts stipulates: "a party who fails to fulfil its obligations must notify the other party of the obstacles and their influence on the performance capability. If the other party fails to receive the notice within a reasonable period of time after the party has known or should know the obstacle, the non performing party shall be liable for damages caused by the other party for failing to receive the notice. "

(two) no force majeure clause is stipulated in the contract.

Force majeure is a statutory exemption requirement stipulated in the contract law and does not require contractual agreement. Therefore, even if the two parties have not agreed on the corresponding provisions in the contract, if the exemption is in conformity with the force majeure provisions stipulated in the contract law, the law can still apply.

(three) force majeure clause is stipulated in the contract, but it is different from the scope of the statutory provisions.

1, if the force majeure clause is less than the statutory limit, the contractual obligor may directly invoke legal provisions for exemption.

2, if the force majeure clause is greater than the statutory scope, the part beyond the legal scope should be regarded as an exemption clause which the parties agree to set up and may also claim exemption.

(four) apply for the force majeure factual proof to the CCPIT in a timely manner.