The principle of freedom of covenants referred to in art. 1255 of the Civil Code allows the parties signing the contract to agree (i) which scenarios and situations should be determined as constituting cases of Force Majeure and/or fortuitous event and (ii) what should be the consequences of those situations.
Should the Contract not expressly regulate those scenarios, then the provisions of the Civil Code must apply. Although in the Spanish Civil Code there are many references to both figures, Force majeure and Fortuitous event, the fundamental precept that applies is article 1,105 which establishes:
“Outside of the cases expressly mentioned by the law and those in which the obligation states so, no one is liable for those events that could not have previously been foreseen or that, foreseen, were inevitable”
These unpredictable or inevitable events, in the terminology of the Civil Code are those that are usually called as cases of Force Majeure or Fortuitous even.
The jurisprudence has required for the application of art. 1,105 the following requirements:
- It must be an event not attributable to the party liable to fulfil the obligation (the debtor).
- It must be unpredictable, or if it is predictable, it must be inevitable.
- The event must be caused by and have as a consequence the breach of the obligation, this means there must be a causal link.
As stated in the doctrine of the Supreme Court, Force Majeure means an unexpected event that, even if it could be avoided, could not be resisted. That is, what cannot be prevented or in the case it can be prevented, cannot be avoidable or resisted, and this without the intervention of any fault of the agent as it comes from an event not foreseen or unpredictable, insurmountable and inevitable.
The distinction between Force Majeure and Fortuitous Case does not appear in the Spanish Civil Code but the jurisprudence has defined it as follows: the Fortuitous Case would be the unpredictable event, and the Force Majeure the inevitable; in short, a matter of graduation, but in both cases, with application of article 1,105 and without significance for the purposes of this note.
In any case, the occurrence of an event that can be classified as Force Majeure or Fortuitous event directly affects the core of the contract, that is, the fulfillment and enforceability of the obligations and their consequences could be:
- They can cause the total and definitive impossibility of complying with the obligations, freeing the debtor from its obligations,
- They may cause partial inability to comply; in this case the debtor would only be released in the part that is impossible to fulfill, but would still be bound by the part that can be carried out.
- They may cause temporary impossibility to comply; then the debtor would be released from the responsibility for default as long as the exceptional situation persists.
Therefore and in conclusion,
(i) If the contract includes Force Majeure or Fortuitous event clauses, the contractual text must be in place to determine a) if the event can be characterized as such and b) what are its consequences. It is frequent in the contractual clauses regulating Force Majeure to foresee that if it subsists for a certain period of time, any of the contracting parties may terminate the contract. The following is a broad standard clause model without blocked number :
“For the purposes of this Agreement,” Force Majeure “means any act or fact that is unforeseeable or that, if foreseeable, is inevitable. The Parties agree that the following events shall constitute, including but not limited to, cases of force majeure: (i) natural disasters such as earthquakes or volcanic eruptions, (ii) war, riots, civil revolt, acts constituting rebellion or revolution, terrorist acts , (iii) actions or orders of any government or authority (including denial or revocation of any license or permit), (iv) fire, explosion, floods, or exceptionally adverse weather circumstances, (v) failure in the electrical supply or in the telecommunication lines, (vi) attacks, theft, intentionally caused damages, general strike or strike of a specific sector, excluding specific strikes of a company, lockout (viii) declaration of a state of siege of exception or alarm due to epidemics, pandemics or in general situations of health risk for the population.”
(ii) If the contract does not include the aforementioned clauses, article 1,105 of the Spanish Civil Code will apply and if the case meets the requirements listed above, then it will have the potential to free the debtor from complying fully or partially, definitively or temporarily with the obligation.