The Law of Contracts in the Age of the Coronavirus Pandemic: Is the Statutory Risk Allocation pursuant to the Swiss Code of Obligations still adequate?
41 Pages Posted: 3 Sep 2020
Date Written: 2020
Pacta sunt servanda – agreements must be kept. This general principle of civil law requires that both or all parties to commercial contracts are expected to meet their contractual obligations, at least as long as performance is still possible and circumstances do not change fundamentally, thereby ensuring the efficacy and the efficiency of our system of private ordering. In March 2020, however, the rapidly spreading coronavirus outbreak, which was eventually declared a pandemic by the World Health Organization, all of a sudden changed everyday life all over Europe from one day to another. Airlines were cancelling flights, companies were closed down, and consumers were rapidly changing their buying behavior. In addition, many European countries, including Switzerland, enacted emergency decrees, according to which national borders were closed, cities were sealed off, major events with more than a certain number of people were banned, and teaching in schools and universities was suspended, at least for some time. There is no need to say that this situation caused considerable difficulties for all participants in the economy, business enterprises and consumers alike. Against this backdrop, I elaborate on both the remedies for a breach of contract provided by the legislator as well as the adaption and the termination of contracts by a competent judge in order to address the question, whether the statutory risk allocation pursuant to the Swiss Code of Obligations is still adequate or not. A functional and doctrinal approach is used to unfold and analyze this timeless question from a contemporary perspective.
Keywords: Corona and contracts; subsequent impossibility of performance; delay of performance; adaption due to a change of circumstances; termination for cause.
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