Sirel  Partners Law Firm
Kadrioru Plaza

Vesivärava 50

10126 Tallinn, Estonia

Tel: +372 606 9600

Fax: +372 606 9601

E-mail: info@sirel.com

 

 

  



 

 

 

 

  

Is the breach of obligations excusable in light of COVID-19?

Since March 12, an emergency situation was declared by an Estonian Goverment due to the spread of coronavirus. The whole economic environment has changed dramatically and a great number of enterprises are faced with the ruthless truth of not being able to fulfill their contractual and non-contractual oblgations. A question of what can be done to protect ones company and legal rights is being asked by many right now.

According to the Law of Obligations, such breach of contractual obligations is excusable if it is caused by force majeure. Force majeure clauses are contractual clauses which alter parties' obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.

In case of contractual obligations, force majeure is, as a rule, governed by the contract and therefore all the specific rules on force majeure should be verified within the contract concerned.

As each situation is unique, it is impossible to draw a general and unequivocal conclusion, however given the current state of emergency, it is highly likely that the situation declared by the Government would qualify as force majeure and provide a legal relief on breaching obligations.

In the event of force majeure, the breach of debtors obligations is only excusable as long as the circumstances giving rise to force majeure persist and the extent of which force majeure prevents the fullfilment of ones obligations.

The party who is in breach of its contractual obligations due to force majeur is obliged to inform the other party of those circumstances immediately and give reasons of failure to fullfill its obligations.


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Is the breach of obligations excusable in light of COVID-19?

20.03.2020

Since March 12, an emergency situation was declared by an Estonian Goverment due to the spread of coronavirus. The whole economic environment has changed dramatically and a great number of enterprises are faced with the ruthless truth of not being able to fulfill their contractual and non-contractual oblgations. A question of what can be done to protect ones company and legal rights is being asked by many right now.
Read more >>>