COVID-19 and international sale contracts: unprecedented grounds for exemption or business as usual?

Abstract

The year 2020 has witnessed a health crisis of unparalleled dimensions that has triggered ongoing complications on a global scale. Through restrictions on economic activities and disruptions in supply chains, COVID-19 has severely impeded global trade. Among the ensuing problems, the question of excusing a party’s failure to perform its contractual obligations is of key interest. This contribution analyses the conditions for exemption from liability with view to contracts for the international sale of goods subject to the 1980 UN Convention on Contracts for the International Sale of Goods. It revisits the statutory requirements and illustrates COVID-19 scenarios that might satisfy the relevant thresholds. This article further examines the particular legal consequences following from an exemption from liability, including the controversial discussion as to the adequate remedies in cases of economic hardship. Finally, this contribution addresses the newly revised International Chamber of Commerce’s clauses on force majeure and hardship.