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Can you as a business invoke force majeure with respect to your own customers if your supplier no longer delivers?

Thursday 19/03/2020
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That depends upon the following:

Your contract is unambiguous

To begin with check your contract conditions (contract, general terms and conditions, etc.) in detail. They often stipulate that you cannot be held liable for matters for which you are dependent upon a third party. A stipulation of this kind will prevent you from having to pay compensation to your customer for late, or even no, delivery or service provision.

Your contract does not provide for this

If there is no relevant stipulation in your contract, the question arises as to whether the default of your suppliers means that you can invoke force majeure with respect to your customers.

Under Belgian law compensation is payable in the event of non compliance with, or a delay in the implementation of obligations. Unless this is the result of extraneous events/causes that are not attributable to the debtor and there is no question of bad faith. If the debtor is prevented by force majeure, no damages shall be due.

What is force majeure?

Force majeure is an insurmountable obstacle to the fulfilment of an obligation, i.e. an external circumstance outside the debtor’s control which makes it impossible for him to comply with his obligations.

Two conditions must be met:

  1. It must be (temporarily) impossible to deliver your commitment.
  2. This impossibility should not be attributable to you. This second condition is often understood to mean that the impossibility must be unforeseeable and unavoidable.

Interpretation of force majeure

The interpretation of this 'impossibility' is a subject for discussion. According to some it must be 'absolute', whilst others assume that it must be 'reasonably' impossible to comply with commitments. We believe that the latter is preferable.

If you can demonstrate that it was not reasonably possible to comply with your commitments, you can invoke force majeure. This may be the case, for example, if it was impossible to find a new supplier at short notice and subject to normal conditions.

What are the consequences of force majeure?

Does force majeure completely release you from your obligations to deliver the goods or provide the proposed services? That depends.

  1. In the event of definitive force majeure, you are permanently released from your obligations.
  2. If the force majeure is only temporary, your obligations will be suspended as long as the force majeure applies, providing the nature of your obligations and the agreement with your customer allow it. As soon as it becomes possible to meet your obligations again, you must fulfil them without delay.

If you have other questions regarding the Corona crisis, please visit our special FAQ

Last update: 30/04/2020

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Bert Lutin
Bert Lutin
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An Lettens
Partner Tax & Legal Services