With the development of the novel coronavirus epidemic, the government has successively introduced a number of measures to prevent and control the epidemic, including delaying the resumption of work. In addition, on January 30, 2020, the WHO officially declared this outbreak to constitute a public health emergency of international concern. As a result, it has had a huge impact on the contract performance of domestic and foreign enterprises, and has been hindered in many aspects such as the production of goods, import and export logistics, and also interfered with some normal market transaction orders.

The problems of contract performance and liability caused by infectious diseases had precedents in the SARS period 17 years ago. In 03, the Supreme People's Court issued the Notice on Doing a Good Job in the Relevant Trial and Enforcement Work of the People's Courts during the Prevention and Control of Infectious Atypical Pneumonia (Law [2003] 72). "Due to the SARS epidemic, contract dispute cases in which the performance of the original contract has a significant impact on the rights and interests of one party may be handled according to the specific circumstances and the principle of fairness may be applied. Disputes arising from the failure to perform the contract directly due to administrative measures taken by the government and relevant departments to prevent and control the SARS epidemic, or the inability of the parties to the contract to perform at all due to the impact of the SARS epidemic, shall be properly handled in accordance with the provisions of Articles 117 and 118 of the Contract Law of the People's Republic of China. "In judicial practice, court judgments generally take force majeure or change of circumstances as the basis for determining cases. The epidemic is similar to SARS, so this article intends to discuss the legal effects of force majeure under the epidemic from the perspective of contract performance.

1. Legal provisions

Article 180 of the General Provisions of the Civil Law: "If you are unable to perform your civil obligations due to force majeure, you shall not bear civil liability. Where laws provide otherwise, follow those provisions. Force majeure refers to objective circumstances that cannot be foreseen, avoided and overcome. ”

Article 117 of the Contract Law: "If the contract cannot be performed due to force majeure, the liability shall be partially or completely exempted according to the impact of force majeure, except as otherwise provided by law." If force majeure occurs after a party delays performance, it cannot be exempted from liability.

"Force majeure" as used in this Law refers to objective circumstances that cannot be foreseen, avoided or overcome. ”

Article 118 of the Contract Law: "If the contract cannot be performed due to force majeure, the liability shall be partially or completely exempted according to the impact of force majeure, except as otherwise provided by law." If force majeure occurs after a party delays performance, it cannot be exempted from liability. ”

Article 94 of the Contract Law: "A party may rescind a contract under any of the following circumstances: (1) the purpose of the contract cannot be achieved due to force majeure; ”

2. Constituent elements

According to legal provisions and legal theories, it is generally believed that force majeure has the following characteristics: [1] unforeseeable; [2] It cannot be avoided; [3] Insurmountable;

The new coronavirus pneumonia of this epidemic is a new infectious disease, which is sudden, and the exact source of infection and treatment methods have not been found so far, so it is believed that the epidemic itself meets the characteristics of force majeure. Moreover, the measures taken in response to the epidemic in many regions across the country are indeed unforeseeable situations that enterprises cannot foresee when signing contracts, and cannot be avoided and overcome.

However, it should be noted that even if the epidemic is a force majeure recognized by law, whether it can directly lead to the inability to perform the contract, and whether the contract can use force majeure provisions, should also be examined in light of the parties' expectations and the epidemic process.

(1) From the perspective of the terms of the contract, if there is a specific agreement, it will be performed in accordance with the contract; If the subject of the contract has a description of force majeure clauses such as infectious diseases in the contract, whether it constitutes force majeure shall be handled in accordance with the contract. If the force majeure is not agreed upon during the signing period of the contract, but after the force majeure situation arises, the two parties have reached an agreement on the content of the contract clause and foreseen the situation during the special period, the contract shall also be performed in accordance with the contract.

(2) From the perspective of the development process of the epidemic, there are differences in whether the epidemic is at different stages and whether it constitutes force majeure; The composition of force majeure is unforeseeable based on the epidemic, so there are differences in the determination of whether the contract ultimately constitutes force majeure at different points in time when the contract is signed. If the contract was signed before the outbreak of the epidemic and the contract was signed after the outbreak of the epidemic, the expectations of the contract subject for the performance of the relevant contract are different, the author believes that if the relevant contract is still signed after the official notification of the epidemic situation, it should not be deemed to constitute force majeure.

3. Legal effect

The author believes that the relevant causal relationship should be considered in conjunction with the contract itself to determine whether the legal effect of force majeure can be achieved.

The contract itself embodies the autonomy of the parties, and force majeure clearly breaks through the above-mentioned principle, so it is necessary to specifically demonstrate whether the causal relationship is established.

(1) The obstacles to contract performance caused by the epidemic and government prevention and control measures are the basis for establishing a causal relationship; For example, during the performance of the exhibition contract, the epidemic prevention and control measures stipulate that all cultural exhibition activities during this period will be suspended; Another example is that the shopping mall where the shop is located has ceased to operate as a whole due to the epidemic or government prevention and control measures. In such cases, such contracts would be found to constitute force majeure. In the same case, the performance of the contract by other means, such as loan repayment, may not necessarily constitute force majeure.

(2) the debtor is not at fault in the performance of the contract; Paragraph 1 of Article 117 of the Contract Law stipulates: "If force majeure occurs after a party delays performance, it cannot be exempted from liability. Therefore, if force majeure occurs after the debtor's defective performance or refusal to perform during the performance of the contract, the party performing the obligation shall not claim force majeure exemption for the breach of contract arising from the defective performance or refusal to perform.

If the above conditions are met, it constitutes force majeure for the performance of the contract. This has the relevant legal consequences. The contract is based on autonomy of meaning, the parties to the contract have an agreed basis, and if there is no agreement or the agreement is unclear, the epidemic will produce the following legal effects when it constitutes force majeure and has a causal relationship with the parties' inability to perform the contract:

(1) Exemption from liability for breach of contract. A contract subject affected by force majeure may be exempted from the corresponding liability for breach of contract in accordance with the law, but the scope and degree of exemption shall be commensurate with the impact of force majeure.

(2) If the purpose of the contract cannot be achieved due to force majeure, the contract may be terminated. According to Article 94 of the Contract Law, a contract can only be rescinded if the degree of force majeure affects the extent of the contract and the purpose of the contract cannot be achieved.

4. Response suggestions

Based on the above analysis, force majeure in contract performance still needs to be analyzed on a case-by-case basis, and for relevant contract subjects, they should assess the impact and risks in the process of contract performance, take reasonable measures based on their actual situation, and strive to reduce or even avoid risk losses.

(1) Try our best to communicate and negotiate with the counterparty to the contract. The party affected by the epidemic shall, in the event of corresponding force majeure, promptly communicate and negotiate with the other party in the contract to mitigate the losses caused to the other party and reduce its own possible compensation liability in the later stage.

(2) notify the other party by appropriate means and prevent the expansion of losses; As mentioned in the above-mentioned article, the legal effect of force majeure is directly related to the degree of impact, so the contract subject should mainly take appropriate mitigation measures after learning of the impact of the epidemic to avoid the expansion of losses.

(3) Prepare evidentiary materials for potential litigation; The contract subject shall pay attention to collecting relevant evidence, including proof of force majeure facts; Negotiate with the other party to communicate relevant letters to reduce losses; Collect the above evidence, such as factual evidence that you cannot perform the contract, so as to be prepared.

(4) The newly signed contract shall make specific agreements; The newly signed contract shall anticipate the situation of the epidemic, make specific agreements, and adopt the agreement that the epidemic situation is force majeure, or by assessing the epidemic situation and the impact on the performance of the contract, make a practical and feasible clause design that meets the parties to the contract, so as to avoid losses due to the epidemic situation in the later stage.

(This article is translated by software translator for reference only.)