The health emergency and the State of Alarm we are in may have EFFECTS ON CONTRACTS.
The circumstances that may arise during the life of a contract can be altered when a breach occurs due to force majeure, beyond the will or fault of either of the parties.
On these occasions, especially if it drags on over time, it is when a breach occurs that the so-called “rebus sic stantibus” clause comes to the fore, grounded in unforeseeability and unavoidability, and which allows the terms expressly agreed in contracts to be cushioned or adjusted.
Understandably, the current situation may allow this clause to be applied in numerous cases, even where it is not expressly set out in the contracts. By way of example, we can mention the following: penalties for breach of product supply, failures to meet the agreed deadlines, leases of premises that have been unable to open to the public, fees for services not provided, and so on.
Nevertheless, it must be made clear that this clause does not grant the right to break what has been agreed in a contract, although it does open a door to negotiation on a legal basis, for which an analysis of the specific circumstances will be necessary.
The conclusion of all this is that the exceptional circumstances we are living through demand an effort from everyone. That will be the way to achieve a balance in agreements that allows a fair solution.