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What if an international trade contract cannot be fulfilled?

Publisher: Wuxi Konid Import and Export Trading Co., Ltd. release time:2020-6-19 11:10:51 The number of clicks:579 shut down
In order to effectively prevent and control the epidemic and minimize the flow of people, many organizations encourage employees to work from home to meet their work needs. You might think working from home is a comfortable place to be, but it's not as easy as you think, because there's always something coming up and you have to deal with it. As a result, you may be at work for more than ten hours a day.
In the face of the epidemic, the fulfillment of international trade contracts and domestic related enterprises are facing great challenges. Many import and export enterprises are facing difficulties in delivery, tight capital chain, employment difficulties, customer loss, order transfer and other negative situations such as hidden trade barriers and restrictions set by some countries. How to properly deal with international trade contracts, and how to prejudge and take effective measures to solve the disputes that may occur in the process of contract performance are the problems that most domestic international trade enterprises are concerned about at present.
In the practice of international trade, force majeure has a wide range of meanings and is generally beyond the control of the parties, and there is no reason to expect that the parties, at the time of the conclusion of the contract, would take into account the circumstances which would prevent or overcome it or its consequences from the performance of their contractual obligations. At the same time, although there is no such word as "force majeure" in the United Nations Convention on contracts for the International Sale of Goods, article 79 of the Convention clearly puts forward a concept similar to force majeure, that is, in case of events beyond the control of human power, the parties shall not be liable for breach of contract.
In international trade, force majeure events are very common. The details of laws vary from country to country, but generally speaking, an event constituting force majeure needs to meet three requirements: first, unreasonable control; Second, it cannot be reasonably foreseen; Third, it cannot be avoided or overcome. Therefore, this epidemic meets three common requirements in international trade and should be considered as force majeure.
In accordance with the international trade practice and the constitution of China Council for the Promotion of International Trade, CCPIT may issue a force majeure certificate. Upon the issuance of the factual evidence of force majeure, the parties may be exempted in part or in whole from the liability for non-performance, incomplete performance or delay in performance of the contract. On February 5, the Ministry of Commerce issued the Notice on Helping Foreign trade Enterprises to Overcome difficulties and Reduce losses in response to the epidemic situation, requiring all Chambers of commerce to assist enterprises to issue, free of charge, a force majeure factual certificate for failure to deliver the goods on time due to the epidemic situation. As of February 13, zhejiang alone had issued 302 certificates of force majeure related to the epidemic for 209 enterprises. The contract, worth more than 750 million US dollars, involves more than 70 countries and regions including Europe, the United Kingdom, Vietnam and the United Arab Emirates.
However, it should be noted that whether the claim of force majeure exemption or even termination of the contract by Chinese enterprises can be accepted by customers and supported by courts or arbitration tribunals in the future depends on the provisions of the contract and applicable law of both parties. If it is clearly stipulated in the trade contract that the occurrence of the epidemic situation constitutes a force majeure event, and there is a direct causal link between the occurrence of the epidemic situation and the failure to achieve the purpose of the contract, the legal consequences of such occurrence shall be respected and the contract shall be terminated. If there is no clear agreement on this matter in the contract, the applicable law of the contract shall be determined first and the judgment shall be made in accordance with the applicable law. Applicable law refers to the law of a specific country designated by conflict norms to adjust the rights and obligations of both parties in foreign-related civil legal relations.
Different countries have different descriptions and names of force majeure, such as "contract setback" in British law, "contract setback" and "failure to perform" in American law, "subsequent failure" and "loss of transaction basis" in German law. The outbreak of the epidemic has not yet been recognized as force majeure, so countries should also prepare corresponding evidence for proof according to the characteristics of the force majeure.
For enterprises that fail to deliver goods on time or make payment according to the contract due to the epidemic situation, they should first review the trade contract, determine the applicable law, check whether force majeure clauses are stipulated, and prepare relevant evidence to prove that the contract cannot be performed (on time) due to the force majeure situation.
First, the enterprise shall apply for the relevant factual international commercial certificate of force majeure. It is worth noting that this proof must be relevant to the nature or specific performance of the contract, or it cannot be proved to constitute force majeure or achieve the effect of exemption from liability.
Second, inform the other party of the performance of the contract by email, letter, fax or other written means in a timely manner that the performance of the contract is affected by the epidemic situation and cannot be performed normally, and provide the prepared evidence of force majeure.
Third, in accordance with the terms of the contract to notify the other party at the same time, put forward a reasonable solution or appropriate appeal. If a trade contract fails to reach agreement through negotiation, the enterprise should have the awareness of collecting evidence, keep the evidence that the contract cannot be performed or has a material impact on the performance of the contract due to the epidemic situation, and be prepared for litigation and arbitration to safeguard its legitimate rights and interests.

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