Amid the pain of human losses and the enormous economic repercussions linked to COVID-19, in the legal sphere—particularly concerning contract fulfillment—the concepts of force majeure and fortuitous event appear as events with liberating force.
Force majeure or fortuitous event? The debate is broad and varied, ranging from whether a fortuitous event and force majeure are equivalent and interchangeable terms to whether the force majeure event itself is the pandemic or the government acts that order confinement, impose border closures, etc.
In practice, what is probably most relevant is determining the repercussion of an event like COVID-19 and the consequent acts of authority on contracts.
There is no doubt that the COVID-19 epidemic—and particularly the provisions issued to alleviate the health emergency—meets the legal requirements of unforeseeability, inevitability, and lack of fault. Therefore, we are facing a force majeure event of a temporary nature.
The next thing to determine is whether COVID-19, as a case of force majeure, impacts the fulfillment of the contract. If it does, and it makes fulfillment difficult or impossible, its effects will have to be examined from a legal perspective. If not, it won’t.
If there is an impact, what is the magnitude of the “liberating effect” in the contractual sphere?
If the law says nothing about the particular case and the parties have not agreed otherwise, the effect of force majeure is to prevent the birth of civil liability for the contractual obligor. That is, as a result of the force majeure incident, the debtor cannot be required to pay compensation for damages resulting from the delay. And on the other hand, the fulfillment of the obligation is suspended.
However, the occurrence of a force majeure event does not necessarily imply the extinction of the obligation. Force majeure does not have the unavoidable consequence that the debtor is released from fulfillment: if the obligation is still possible, the debtor remains obligated to fulfill the performance from the moment the force majeure ceases.
Force majeure only releases the debtor in cases of loss of the item or absolute impossibility of fulfillment. If the force majeure does not cause the loss of the due item, nor does it make the execution of the agreement absolutely impossible, the obligation remains in force and must be fulfilled.
Thus, with respect to COVID-19 as a force majeure event, the exemption from liability referred to by the law means that the debtor is exempt from liability for any damage resulting from the delay, but not from the release from the fulfillment of the obligation, which remains in force if it is still possible, considering the due item and whether or not time is of the essence for the execution of the agreed performance.