If looking back atCivil and Commercial Code (P.D.) Section 8 defines the definition “force majeure” saying, “Whatever cause will be good will give good resultscause that cannot be prevented Even if the person who has to experience or is close to having to experience it will be handled with due care. which can be expected from a person in such position and condition”
and in the Civil and Commercial Code, Section 219, stipulating that “if the payment of debt becomes impossible because of any circumstance which occurred after incurring debt and which the debtor is not responsible for that the debtor shall be released from the performance of that debt…”
Contract clauses about force majeure will be like the principle under Section 219 is a contract that can make that one party affected by force majeure Inability to comply with the contract or delayed fulfillment of the contract not considered breach of contract or liability
Most force majeure contract clauses Examples of events considered force majeure are included: floods, earthquakes, storms, natural phenomena, fires, strikes, wars, terrorism, riots, political turmoil, epidemics of contagious diseases. travel restrictions shortage of raw materials
duringOutbreak of contagious disease, COVID-19 There is a lawsuit that has an issue of interpretation of the meaning of force majeure. Situation of the epidemic of contagious disease, COVID-19 or government policies to control the spread of the COVID-19 disease
It is considered a force majeure event that causes the parties to the contract affected. can claim to deny responsibility as a result of their non-compliance with the contract or delay in complying with the contract or not has been brought to court in many countries.
In addition, last year there wasBoat runs aground blocking Suez Canal Closing the shipping lanes causing sea transportation to be stuck. and a chain reaction This caused delays in international shipments that affected many countries around the world.
Most recently, the force majeure clause has become an important issue again, assituation in Russia and Ukraine also in the present The tension between China and the United States
It is another matter that causes many companies to look back at the contract terms in terms of force majeure in their own contracts. What does force majeure include and what does it not include, and is it adequately covered?
Japan’s Nikkei newspaper A survey was conducted on reviewing and amending contracts from the perspective of economic sanctions and retaliation risks. More than 20% of companies answered that Over the past three years, contracts have been reviewed from the perspective of punitive risks and economic retaliation.
And more than 17 percent of companies said they were in the process of being revised.contractOr is there a plan to review the contract from the perspective of sanctions and retaliation risks?
In terms of the content regarding the amendment of the contract Most contracts are amended to add matters.the use of economic sanctions policies shall be counted as part of force majeure as well
It also added a statement to the contract stating that each party was not a sanction list company, and adding a statement to the contract that it did not engage in military activities for a specified period of time.
As for the source of international security concerns, First of all, it’s about the situation in Russia. And followed by the tensions of the United States and China. and the third is about the situation of China and Taiwan.
The international political situation during the past year was heated and developed at an unprecedented speed. Entrepreneurs should reconsider their contracts to see if the existing contracts are adequately hedged against this risk.
Business&Technology Law column
Phumipat Udomsuwankul
Panupan Udomsuwankul
Legal consultant for Thai-Japanese M&A
[email protected]