Commercial contracts amid COVID-19 : the implications of force majeure

Abstract

The Maltese Civil Code caters for fortuitous events to free a person from liability, however it falls short in specifically addressing force majeure issues as a result of COVID-19 and consequently their effectiveness is to be questioned. In the available literature discussing force majeure as a general concept, Maltese courts have delved into its applicability in-depth and have come up with a set of criteria that ascertain when force majeure can be triggered. A number of these judgements have been delivered in connection with the war scenarios, where Malta was experiencing an emergency situation. It will also provide a number of defences that have been accepted by the courts, even when contracts have omitted force majeure clauses, which may be used not to honour an obligation in pandemic scenarios. As it stands, literature relating to the implications of force majeure during the pandemic is scarce, and the Maltese courts have only pronounced one judgement in this respect. Therefore, this dissertation will be exploring the possible outcomes of commercial contracts in pandemic scenarios in a coherent manner, through a comparative analysis of Maltese war cases and foreign judgements as only these cases are available for discussion. Moreover, this dissertation aims to provide recommendations which serve as a guide when drafting force majeure clauses to parties who wish to enter into commercial contracts in the future, or wish to amend their current active contracts.