The use of force majeure clause in contracts is very important for businesses

Prishtina, May 21, 2020  – Although the Kosovar legislation leaves the inclusion of force majeure in contracts at the discretion of the parties involved, COVID-19 pandemic as an unpredictable and uncontrollable event has highlighted the need for incorporation of this clause in contracts, especially considering the emergence of numerous inabilities to act by any party as a consequence of this pandemic. This was said among others in the latest virtual forum organized by the American Chamber of Commerce in Kosovo, in cooperation with the USAID Program for Commercial Justice on the use and various challenges of the force majeure clause in contracts.

Attorney Fisnik Salihu stressed that the pandemic has noted the need for more comprehensive contracts, in order for parties to protect their positions throughout the duration of the former. Salihu added that in order to use the force majeure clause during this situation, the contract signed between the business and the party as well as the listing of the clause in the contract must be reviewed with legal advisors, for predetermined deadlines to be respected, and for the party to be released from contractual obligations. Furthermore, he stated that COVID-19 is classified as a force majeure in legal terms, so businesses may call upon the force majeure clause for reviewing and retaining of the position stated in the contract.

Attorney Visar Ramaj stated that because of a force majeure as COVID-19 is in this case, businesses have not had effective access to legal mechanisms, which has caused multiple delays in the processing of cases. He added that as far as risk sharing goes, a signed contract between two parties is an instrument that allows the discussion of unpredictable events, through the force majeure clause. According to Ramaj, in case the parties have not specified their actions in case a force majeure happens, the dispositions of the Law on Obligations will apply to their contract. He also stressed that if the obligations under contracts are not fulfilled due to this force, the party does not possess the right to sue for compensation, but can only terminate the contract in hand.