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General Lawyers

Coronavirus and Treaties Rent, delivery, services

I am still considering the effects of the coronavirus pandemic upon contractual relations. Subscribers send me questions. The articles “Coronavirus & Treaties” provide a good introduction to the topic. Common points and Should the tour operator pay the money back to the agency? “.

What about the rent we pay for the rental premises if the entertainment center is closed due to quarantine?

A general quarantine has not yet been declared in Belarus. According to my understanding, the owner closed the center for quarantine. The owner should agree to the collection of rent in this instance.

If the center is closed and you are unable to get in, we will say you cannot use the premises. Rent for the facility should therefore not be charged.

If you are allowed to use the premises but there is no visitor in the center that has contributed revenue, we can discuss a significant change in the circumstances you were in when you concluded the contract (Article 421, Civil Code). This allows you to request the landlord to amend the rent amount or terminate the contract.

If the landlord refuses to sign it, you can file a lawsuit in court to modify or terminate the contract.

Due to the ban on exporting this type of goods from the country of origin, the supplier is unable to fulfill its obligations in Belarus. Let’s suppose that the Chamber of Commerce and Industry confirms the country of manufacture under a foreign trade agreement.

1. What is the effect of force majeure on a supplier-buyer relationship in the country? Is it possible to confirm inside the country? Or is a copy from the manufacturer sufficient?

2. It is not necessarily a ban but the transport connection has been cut and it is unclear when it will be resumed. This causes the delay in delivery.

3. Let’s say China. The work of state agencies has been suspended. No one can issue a document on force majeure. What other evidence should be used?

I will respond to your questions in the order you have.

1. In general, failure by the counterparty to the contract to fulfill its obligations is not considered force majeure. For more information, check the clause in your contract with the buyer. If the clause does not state explicitly that your foreign counterparty’s failure to meet its obligations is force majeure, it will not be force majeure.

This phrase should be included in any new treaties. While this will not guarantee force majeure recognition by your foreign counterparty of non-fulfillment, it will increase the chance.

If your supplier cannot deliver a product made by one factory, it is considered that you have the right to buy the goods from another source. It doesn’t matter if the situation is economically intractable. It is not force majeure if you are short of money or suffer losses.

You can use force majeure to refer to a material change of circumstances. In such cases, you may try to modify the contract with your buyer, or to terminate it.

Another option is to enter into an agreement with your counterparty regarding the recognition of these circumstances and force majeure.

2. If the transport connection is blocked, then the answer to the second question will be the same: if the goods can be purchased elsewhere and are not uncommon, it is not force majeure. Use Article 421 of Civil Code to determine if these circumstances are force majeure.

3. It will be a matter of providing evidence. There will be general rules for evidence that each party must follow to prove the facts. Evidence can include witness testimony, written evidence, and so on. The court will review the evidence and decide on it based on its internal conviction.

If an act of the competent authorities is attached to the notification of force majeure and the authority ceases to be working, evidence will be required.

I have agreements with contractors in the United States. Can one party fail to meet its obligations?

First, force majeure is not an exemption from fulfilling obligations under the contract. It does not exempt from liability for the non-fulfillment of obligations. They may stipulate in contracts that in case of force majeure the obligation to fulfill is delayed for the duration of force majeure. The counterparty must comply with its obligations. Only thing is that execution cannot be delayed beyond the expiration of force majeure.

Second. Second. You can terminate the contract according to the procedure in the legislation and/or the contract.

An event in Poland was postponed. First, the group was invited to serve. It turned out that schools were not open for quarantine. There was nowhere to go No one is to be blame. What documents are used to define force majeure in this situation? 2. What documents are required to support the claim?

In the section on force majeure, it is usually clearly indicated what documents they should include. Most commonly, this document is a certificate of authority (for instance, the Chamber of Commerce and Industry).

The parties can agree to the list if the documents are not included in the contract. A party can also recognize a specific situation as force majeure through their agreement.

The court will resolve any dispute between the parties if they look at it differently. You can present any documents or other evidence to support your position.

If the office is taken for public events, and a ban is announced (it’s clear that we will delay such ban to the last and nonetheless), it would be a problem. How will this impact the rent? The rental rate and its components (such as services, maintenance, etc.) will all be affected. )

A ban on events can be considered a significant change of circumstances if it is enforced. This is the basis for a landlord being able to terminate or change the contract. If he doesn’t agree, you can file a lawsuit before a court.

If the ban is not official, you can negotiate with your landlord. In this case, I believe that many tenants will negotiate. A reduction in rental rates can be negotiated. It is unlikely that the landlord will reduce the amount of operating and utility costs. Although the landlord may be able to cover some of the costs, I doubt it. I have never met landlords who could do this in the 13 years I’ve been managing a business and renting out offices.

It is quite curious to see how tenants of the GHU or BelEZ will be treated in case of quarantine.

GCU and BelEZ can be described as service organizations. A Presidential Decree sets the rental rate. I don’t recall if the GCU had the power to examine individual rates. If there is not a corresponding Decree, the rates will remain the same in cases of quarantine for renting premises from GHU.

There is one plus: the rates in this instance are in rubles and not foreign currency. The currency equivalent of rates falls when the ruble exchange rate drops.

This virus can cause a business owner to become ill and the client may not be able to receive the services they contracted. What penalties may apply and whether the customer has the right to a refund.

As a rule, force majeure is not the disease of an individual entrepreneur. This is a risk the entrepreneur takes. If the contract’s section on force majeure doesn’t explicitly state that the illness caused by coronavirus is due to force majeure circumstances, the general rules will apply. If the customer loses interest in the contractor, he can apply penalties and refuse to perform.

Will the BelCCI decide in each case, country-by-country or in a common situation?

The BelCCI hosted a seminar last week on force majeure. It was closed to members only and the information was not made public. To answer my questions, I will contact the BelCCI separately. If I receive information about them, I’ll write it in my own words.

The following approach is used to recognize force majeure in certain circumstances: Each case is examined. One person cannot give a general certificate of presence of force majeure within a country.

The confirmation from the Chinese competent authorities confirmed that the coronavirus would prevent them from delivering on time. The coronavirus is therefore force majeure. The question is, can European suppliers refer to the coronavirus measures that have been taken in China, since their components/individual items of goods are made in China?

As I mentioned above, failure by the counterparty to the contract to fulfill its obligations is not force majeure. European suppliers can also refer to China’s actions. Much will hinge on the position of any second party to the contract.

You can also sign an additional agreement to the contract with her if she agrees that force majeure is involved. This will prevent the European supplier from being held responsible for late performance. If the second party insists upon penalties, it will be necessary for the court to decide the issue and to present all evidence.

We are van manufacturers, the equipment has been imported, orders have been collected until mid-April and we have received an advance payment. We are still unable to deliver the van by the agreed delivery date due to equipment shortage. Will the situation with coronavirus or the closure of the border be considered force majeure?

As I mentioned above, failure by the counterparty to the contract to fulfill its obligations is not force majeure. These components can be bought in other countries if they are not exclusive to one company and the border is not closed.

Try to negotiate with your customer. Then, sign the appropriate agreement to your contract to recognize that force majeure has occurred. If the customer refuses to sign the agreement, there are options for him to terminate the contract and receive a refund. You may also be subject to penalties for any violation of the terms. The court will make the final decision in this instance. He will review all of your actions and circumstances.

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