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Contract obligations in Russia during COVID-19

The Supreme Court in its review on the coronavirus has put forward several theses that may be a valid reason for termination of obligations or exemption from liability.

The concept of force majeure existed long before the outbreak of the global COVID-19 pandemic, but in practice, the application of force majeure provisions has always been an exceptional case.

That is why now those whose business was affected by COVID-19 have many questions, for example, does the coronavirus belong to force majeure circumstances? Does the coronavirus release you from contract obligations? Using the example of a contract, we will try to answer these questions.

We know that in the contract agreement the main place is given to the work performed, which means that in addition to the final result of the work, it is also important how the work is done.

As you know, under the conditions of the coronavirus, most of the contract work was virtually impossible, so the Customer and the Contractor often had disputes.

Before the coronavirus, it was very common to find force majeure clauses in work contracts, but for the most part it was never applied.

Meanwhile, in some cases, a force majeure and force majeure treaty clause can be applied to the coronavirus pandemic.

Exemption from liability for violation of the work contract in connection with the coronavirus
In the Survey on Coronavirus, the Supreme Court pointed out the signs in the presence of which circumstances can be considered force majeure:
  • Extreme - means that this kind of circumstance usually does not occur, their appearance is an exception to the rule.
  • Inevitability - means that none of the other participants in the civil turnover could avoid the onset of similar consequences.
  • Preventing Potential Adverse Consequences in good faith.
It follows from this that there will be no automatic exemption from liability for violation of the work contract if such a violation occurred during the period of the coronavirus. The party claiming exemption from liability will need to submit evidence to the court confirming the above signs.

An approximate list of necessary evidence can be described as follows:
  • evidence of the existence and effect of restrictions on the contractor (orders of state authorities, orders of local authorities that apply to your activities)
  • transfer of contractor's employees to a remote work schedule or sending employees on vacation
  • closure of the construction site by the owner of the land plot, etc.

Change or termination of the contract in connection with the coronavirus.
Continuing to analyze the Supreme Court Review No. 1 on coronavirus, we have highlighted the signs in which, in relation to the contract, you can count on amending or terminating the contract:
  • It is possible to terminate the contract when the circumstances have changed so significantly that knowing about them at the conclusion of the contract, the parties would not have concluded an agreement on the agreed terms
  • Amendment of the contract is possible when the termination of the contract would be contrary to the public interest, however, the execution of the contract on the previous conditions will attract unreasonable losses

The possibility of changing the contract at the request of one party in today's legislation really takes place, but here also a lot of attention is paid to the issue of presentation of evidence.
At present, these questions are the most relevant for Moscow.
As you know, in the period from April 13 to May 12, 2020, construction activities were suspended in Moscow.
Such restrictions have become a common cause for disputes between the parties about their rights and obligations under the contract.

Our attorneys and lawyers in Moscow and Kemerovo deal with dispute resolution under a contract agreement and are ready to provide you with qualified legal assistance.

Tel: +7 909 961-19-09
Visit us: Moscow, Zubovskiy bulvar, building 4, room 308

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