FORCE MAJEURE, REBUS SIC STANTIBUS, AND COVID 19

Article 1184 of the Civil Code says that “the debtor will also be released in the obligations to do, when the provision is legally or physically impossible.” In other words, once an obligation has been contracted, extraordinary circumstances may arise that make compliance impossible.

Force majeure can be one of those circumstances. This is defined as the generation of an unforeseeable circumstance that alters the conditions of the obligation in a way that makes its fulfillment impossible.

The occurrence of a pandemic, which forces a state of alarm to be decreed, generating many deaths, and restricting the fundamental rights of people is, of course, an extraordinary circumstance, which can often make it impossible to fulfill an obligation and, consequently, extinguishes it.

When extraordinary circumstances do not totally impede compliance, but substantially alter the contractual conditions between the parties, the application of the “rebus sic stantibus” clause arises, altering the circumstances. This doctrine is of jurisprudential application, and does not enable to extinguish the obligation but to modify its contractual conditions, since it produces a significant disproportion in the balance of the benefits of the contract. It applies to synalagmatic contracts (bilateral, reciprocal and commutative STS 15-4-1991), and that are of a successive nature, such as a lease.

It will be necessary to study each case to see if the occurrence of an extraordinary circumstance affects the fulfillment of a contractual obligation.