“There was an air raid alert, so we did not perform the contract”: when this really is force majeure and when you will still be liable

Air raid alerts, missile attacks, emergency power cuts and communication failures have become part of everyday reality for Ukrainian business. So when a delivery is late or another contractual obligation goes unperformed, you will often hear the explanation: “This is force majeure.” But an air raid alert, the war itself or the absence of electricity do not automatically release a party from liability.

What does the law treat as force majeure?

Under Article 14-1 of the Law of Ukraine “On Chambers of Commerce and Industry in Ukraine”, force majeure means extraordinary and unavoidable circumstances that objectively make it impossible to perform a specific obligation.

The law includes among such circumstances, in particular, war, military action, hostile attacks, blockades, acts of terrorism, sabotage, fires, explosions and a number of other events.

But the key word here is “impossible”.

For example, if a missile strike destroyed the warehouse from which a company was due to ship goods the next day, the causal link between the attack and the failure to perform is obvious. It is a different matter when an air raid alert lasted an hour in the city and the company relies on it as the reason for failing to perform an obligation with a deadline of several weeks.

The power was cut off — can you simply not perform the contract?

Not automatically.

Article 617 of the Civil Code of Ukraine allows a person to be released from liability for breach of an obligation if that person proves that the breach occurred as a result of an accident or of force majeure.

In other words, you have to prove not merely the fact of a power cut, an attack or an alert, but that this very circumstance objectively prevented performance of the specific obligation within the set deadline.

At the same time, as a general rule force majeure does not “cancel” the contract itself and does not mean that the party no longer owes anything to its counterparty. It concerns first and foremost the question of liability for breach of an obligation, where there are proper legal grounds for that.

And how do you prove it?

The terms of the contract itself play an important role. It is worth checking what the parties defined as force majeure, within what period the counterparty must be notified of its occurrence, and which documents confirm it.

Force majeure circumstances are certified by the Chamber of Commerce and Industry of Ukraine and by authorised regional chambers of commerce and industry under Article 14-1 of the Law “On Chambers of Commerce and Industry in Ukraine”.

Alongside this, a business should gather other evidence too: the operator’s notice of an emergency outage, documents on damage to premises or equipment, data on the length of the downtime, correspondence with the counterparty and so on.

One more important piece of advice is not to stay silent. If you realise that extraordinary circumstances mean you cannot perform the contract on time, notify your counterparty in the manner and within the deadlines set out in the contract.

Force majeure is not a universal excuse for any delay during wartime. In every situation you have to identify the specific extraordinary circumstance, its effect on the performance of that particular contract, and to confirm that link properly.

If you still have questions, a dispute has arisen with your counterparty, or you need advice on force majeure, the performance of contracts or other legal matters, please contact the lawyers of the Strategic Advocacy Bar Association.