Pursuant to Danish law, an initial distinction to be made is whether the concept of Force Majeure and/or Hardship is included in the contract or not.
If a contract contains provisions regarding Force Majeure and/or Hardship, the definition and application will always depend on a specific examination and assessment of the wording and circumstances of the particular contract.
However, and if not agreed explicitly in a contract, the concept of Force Majeure will in any event apply as a general legal doctrine pursuant to Danish law if a contract is subject to Danish law.
On the other hand, there is in principle and theoretically no legal doctrine in Denmark concerning Hardship, although the application of Force Majeure may be extended to cover such situations.
However, a variation of Hardship exists, which is often referred to as a “breach of implied conditions”. For the purpose of this overview we will simply apply the term Hardship for easy reference and consistency.
Consequently, the overview set out below only applies to situations where the contract does not contain provisions regarding Force Majeure and Hardship and where the contract is subject to Danish law.
Force Majeure, is a situation where
- an unpredictable, inevitable and external event
- makes it impossible for one or more parties to a contract to perform their duties in accordance with the contract either temporarily or permanently.
The first section above implies that the event was not caused by any of the contracting parties and that the situation is beyond the parties’ control. Further, the parties must not have been able to foresee the Force Majeure event when they concluded the contract.
The second section above implies that performance according to a contract must be impossible. Accordingly, the concept does not cover situations where performance is considered economically or commercially impracticable, unsound or bad – such situations may nevertheless be covered by Hardship below.
Typical examples of Force Majeure include war, natural disasters fire, import restrictions, rebellion, blockade, public seizure, fire, etc.
Hardship, is a situation where
- an extraordinary event
- which the contracting parties could not have foreseen at the moment of conclusion of the contract
- the performance by a party in accordance with the contract, would be unreasonable burdensome and contrary to the party’s implied preconditions, e.g. implication of excessive performance difficulties or expose such party to a disproportionate loss.
As there is no separate legal doctrine in Denmark concerning Hardship a performing party is in principle liable for and obliged to ensure performance according to contract.
However, Danish courts have in very few cases established “Hardship”, in cases where performance by a party pursuant to a contract was considered unreasonable burdensome by the occurrence of the items listed in i)-iii) above. This variation of Hardship pursuant to Danish law is referred to as “breach of implied preconditions”.