After many years of Conferences dealing with issues related to the resolution of disputes, the 38th Annual Conference of the ICC Institute of World Business law reverts to contractual practice. This should not be a surprise as the Institute has always been deeply involved in training practitioners to negotiating and drafting contracts. The seminars on international contracts organized and conducted by Kristine Karsten, an Institute Council Member, are models of the kind.

What may surprise some of the usual readers of the Dossiers of the Institute is the fact that this 17th issue is available before the Annual Conference and not after. Indeed, the Council of the Institute has decided to adopt a new approach concerning the publication of its Dossiers: instead of publishing the works of the Annual Conference several months after the event, it was found more appropriate to ask the Council Members in charge of the scientific program of the Conference, in this case Prof Fabio Bortolotti and Dorothy Ufot, SAN, to regroup in a book prepared in advance of the event significant papers by some of the key speakers on the subject of the Conference, in order to be able to remit this book to the participants with the Conference documents as a basis for discussions. This is the genesis of this Dossier of the Institute.

Force majeure and hardship were not chosen at whim as a theme illustrating the Institute interest for contractual issues. These two institutions are at the heart of the very notion of contract, as they allow to maintain a balance between two basic old principles: "pacta sunt servanda" and "rebus sic stantibus" which have traditionally controlled the effects of the passing of time on the performance of contractual obligations.

Time is one of the challenges of contract drafters. An old peasant told me once that only dishonest persons need written contracts because honest people would keep their word in any case. This would be true if all transactions were instantaneous, like buying bread at the baker’s shop: the customer does not need a written contract of sale in order to be able give its money to the baker before receiving the precious "baguette". He or she knows that the principle "pacta sunt servanda" will be respected within the following second.

The time factor changes everything and requires a careful drafting which covers the expected future conduct of the parties. This is not an answer to the need to be protected from dishonest parties as few people would enter into contract with the knowledge that their contracting partner is dishonest. The contract expresses the will of the parties to organize carefully the future of their relations, in terms of the substance of their respective obligations, their duration and the dates of their performance. Force majeure and hardship clauses are the tools which allow the contracting partners to foresee the reasonably unforeseeable. They deal with impossibility of performance and excessively onerous performance. However, they have a very different historical status in contractual practice.

Everybody is supposed to know what force majeure is. Sometimes translated in English as "Acts of God" when referring to fire, flood, earthquake, etc., it is commonly understood to be an event exonerating a party from liability. Before its 2016 reform, the French Civil Code, stated in its article 1148 that force majeure was exonerating a party who had not fulfilled an obligation from paying damages but it had not been felt necessary to provide any definition of force majeure. A new article 1218 felt that gap with a precise definition in 2016, but it is telling that the country of the codification of the law could wait for a definition of force majeure in its Civil Code for more than 200 years.

In international contractual practice, force majeure is too often left to boilerplate clauses with lists of events of force majeure which raise difficult problems of interpretation: is the list exhaustive or does it show examples of events with characteristics which may be used to admit as force majeure unlisted events which share the same characteristics. This difficulty is increased when the law applicable to the contract is not very familiar with the legal concept of force majeure, such as English law where the doctrine of frustration established in 1863 in Taylor v Caldwell is grounded on very different premises. Moreover, complicated issues of notification of the force majeure event as well as clear definition of their consequences, from suspension of the contract to its termination, requires the guidance of case law, mostly international arbitration case law.

Although they are an avatar of the rebus sic stantibus clause, hardship clauses are relatively new since they started to play a significant role in contractual practice in the last part of the 20th century. They do not contemplate the impossibility of performance but the onerous consequences for a party of the change of external circumstances on the performance of the contract, in particular in long term contracts. Many national law dealt with this problem, such as French law with the concept of imprévision applicable only to administrative contracts, Italian law with its eccessiva onerosità, some Latin American laws or the 1948 Egyptian Civil Code and the laws of all the Arab states which had been inspired by the works of Abd el-Razzâq el-Sanhourî. However, the conditions laid down by these national laws were not always adapted to the needs of modern trade and appropriate solutions had to be found in contract clauses, international arbitration case law, soft law and to some extent, international conventions. More recently, several national laws have taken the problem of hardship into consideration.

The above remarks show the practical importance of force majeure and hardship clauses. The effect on the performance of international contracts of the imposition of economic sanctions, which may be characterized as force majeure events or hardship according to the circumstances, is, among others, an illustration of this importance.

ICC has a great experience in this respect. It offered to practitioners a model for force majeure clauses since 1985. This model was revised in 2003, when a model for hardship clauses was issued as well. A revised version of that clause is currently under discussion and should be approved and published in 2019 and a number of the experts who have contributed to that work are responsible for the content of this Dossier.

A special tribute must be paid to Prof Fabio Bortolotti and to Dorothy Ufot, SAN who, thanks to their knowledge of the subject matter and their impressive efforts have produced another impressive Dossier of the Institute.