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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
Force majeure and hardship are commonly invoked in international trade in case of occurrence of unforeseen events which make performance impossible or impracticable (force majeure) or which substantially upset the equilibrium of the contract (hardship). In the first case the party successfully invoking force majeure will be relieved from performance, while in the second case the party subject to hardship will be entitled to renegotiate the contract and in certain cases to obtain its adaptation to the changed circumstances.
While in the past the events to be considered in this context were mainly “acts of god” (fire, flood, earthquake, etc.), in recent years the growing complexity of trade in a globalized world has substantially increased the number of situations where a party can invoke force majeure and hardship, and consequently put into discussion the basic principle of pacta sunt servanda.