On February 10, 2020, Zang Tiewei, director of the Research Office of the Legal Work Committee of the Standing Committee of the National People's Congress, said that for parties unable to perform contracts due to new coronary pneumonia, it is force majeure that cannot be foreseen, unavoidable, and insurmountable. According to the relevant provisions of the Contract Law, if the contract cannot be performed due to force majeure, part or all of the liability shall be exempted according to the influence of the force majeure, except as otherwise provided by law. In order to prevent the continuous spread of the new coronary pneumonia epidemic, various sectors of the society have adopted a series of measures such as work stoppages, closed communities, and home isolation observation. Affected by these epidemic prevention measures, it will also inevitably lead to the performance of some contracts that have been concluded. In order to balance the two parties The interests of the parties and the maintenance of the necessary trading order, and the inclusion of new coronary pneumonia in the category of force majeure are the natural measures to synthesize the characteristics of the new coronary pneumonia epidemic and maintain economic stability. On April 16, 2020, the Supreme People’s Court promulgated the Guiding Opinions on the Issues of Properly Trialing Civil Cases Involving the New Coronary Pneumonia Epidemic Situation (I) (hereinafter referred to as the Opinions) to clarify and refine the force majeure rules of force, Formally affirmed that the epidemic situation or epidemic prevention and control measures belong to the category of force majeure. Relevant person in charge of the Supreme Law mentioned in the reporter's question on the introduction of the Opinions that the force majeure rules must be applied in accordance with the law while avoiding abuse of the rules and minimizing the impact on the normal economic order under the premise of actively encouraging transactions. Indeed, in the context of epidemic prevention and control, force majeure rules can be said to be a firewall that balances the interests of both parties, but the application of force majeure clauses must also be strict to prevent them from becoming a shield for malicious breach of contract.

1.What is the force majeure clause?

(1) Concept of force majeure clause

Article 118, paragraph 1, of the Contract Law stipulates that force majeure refers to an objective situation that cannot be foreseen, unavoidable and insurmountable. The general view is that natural disasters such as earthquakes, tsunamis, and floods are all force majeure factors. After the SARS epidemic in 2003, the plague also entered one of the categories of force majeure according to the judgment cases of the Supreme People's Court and local people's courts at all levels. Paragraph 2 of the same article stipulates that if the contract cannot be performed due to force majeure, part or all of the liability shall be exempted according to the effect of force majeure, unless otherwise provided by law. If a force majeure occurs after the party delays performance, the liability cannot be exempted. In other words, the force majeure clause exists as one of the legal reasons for exempting the liability for breach of contract.

(2) Force Majeure Clause and Principle of Change of Situation

As an important means to balance the interests of both parties to the contract, the situation change clause is often compared with the force majeure clause, but in fact the two are mutually exclusive. The principle of change of circumstances refers to the principle that after the contract is effectively established, the basis of the contract is shaken or lost due to major changes in the causes that cannot be blamed on both parties. Continued performance of the contract will be unfair, so the principle of allowing the contract to be changed or the contract is terminated. Although the principle of change of circumstances is not clearly stipulated by law, it is stipulated in Article 26 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the <Contract Law of the People’s Republic of China (2), that is, the objective situation occurred after the contract was established. At the same time, the unpredictable and force majeure caused a major change that is not a commercial risk, and the continued performance of the contract is obviously unfair to one party or fails to achieve the purpose of the contract. If the party requests the people’s court to change or terminate the contract, the people’s court shall be based on the principle of fairness. And determine whether to change or cancel according to the actual situation of the case. That is to say, if the situation is changed, it must not be force majeure. In general, the two have the following differences:

In terms of objective performance, force majeure mainly refers to natural disasters and social events; changes in circumstances are manifested in facts other than force majeure that lead to the loss or sway of the contract foundation, such as financial crises and soaring prices.

In terms of application effect, the application of force majeure clause will result in the exemption of part or all of the breach of contract liability, and does not necessarily lead to the cancellation of the contract; the application of the principle of change of circumstances only allows the contract to be changed to a fair state or the contract is cancelled on the basis of the original contract. There is no effect of exempting breach of contract liability.

2.The applicable principle of force majeure clause under the influence of epidemic situation

In the context of national epidemic prevention and control, due to the different degrees of impact of the new coronary pneumonia epidemic in various regions and industries, the application of force majeure clauses due to the impact of epidemic prevention and control should be more cautious to prevent malicious breaches of the contract Into force majeure clause, to ensure the smooth progress of the whole society to resume work and resume production. To this end, the author starts from the four principles of the summary of the application of force majeure clauses when the relevant person in charge of the Supreme People's Republic of China issued the Opinions, and combined with the relevant judicial cases in the SARS period, specifically interprets the application conditions of the force majeure clauses.

(1) Adhere to the principle of encouraging transactions

Article 3, paragraph 2 of the Opinions stipulates: If the epidemic situation or epidemic prevention and control measures only lead to difficulties in performing the contract, the parties may renegotiate; if they can continue to perform, the people's court shall effectively strengthen the mediation work and actively guide the parties to continue to perform If the parties request the termination of the contract on the grounds that the contract is difficult to perform, the people's court will not support it. Continued performance of the contract is obviously unfair to one party, and if it requests a change in the contract's performance period, method of execution, price amount, etc., the people's court shall take into account the actual situation The situation decides whether to support it. After the contract is changed according to law, the parties still advocate partial or full exemption from liability, the people’s court will not support it. The contract cannot be realized due to the epidemic situation or the epidemic prevention and control measures. Support. It can be seen that the supreme law’s attitude towards contract disputes during epidemic prevention and control takes the encouragement and promotion of contract performance as the basic starting point; second, it can be seen that this article essentially stipulates the principle of situation change mentioned above Then, the comparison can be found that the premise of the application of the principle of situation change in contract disputes is that the epidemic situation or the epidemic prevention and control measures only cause the contract to perform difficultly instead of directly causing the contract to fail to perform; in addition, although conceptually force majeure and situation change They are two incompatible categories, but in judicial practice, in the face of complicated cases, the two have played different adjustments in the face of different case facts, and the application of the principle of situation change has also prevented judicial practice The force majeure clause provides a one size fits all approach to handling all cases, giving the contract parties two different solutions to change the contract conditions and cancel the contract, which is conducive to maximizing the accurate resolution of contract disputes.

During the SARS epidemic in 2003, the principle of encouraging transactions has become a basic idea for a judicial organ to handle a case. In the case of the lease contract of Bank of China Danyang Sub-branch v. Jingmou [(2003) Danminchuzi No. 2371] The court held that: “The SARS epidemic occurred after the contract was concluded between the two parties, which prevented the defendant’s restaurant from operating normally, thus greatly affecting the defendant’s ability to perform the contract. In this case, it should be considered that the situation has changed... ...Now the SARS epidemic has passed. As long as the defendant operates normally and pays the rent in time, the continued performance of the contract not only does not affect the realization of the plaintiff’s contractual purpose, but also achieves the defendant’s purpose of renting the house for three years. To encourage transactions, And comprehensively consider the balance of interests of the parties to the contract, so this court does not support the plaintiff’s lawsuit requesting the termination of the contract.

Paragraph 3 of the same article stipulates: If a party is subsidized or funded by the government department due to an epidemic situation or epidemic prevention and control measures, tax relief, or other people’s funding, or debt relief, the people’s court may act as the fact that the contract can continue to be performed. Reference factor. This is also an important basis for judging that the parties to the contract cannot continue to perform the contract, thus providing guidance for the judiciary to apply force majeure clauses or situation change clauses.

(2) Emphasize the priority agreed by the parties

According to the basic principles of voluntary autonomy in the field of contract law, first of all, the parties have the right to make an agreement in advance on the liability for breach of contract, change of contract and cancellation under force majeure. Secondly, after the dispute has occurred, both parties are encouraged to resolve the dispute through negotiation. The parties should fully respect the contract after the two parties negotiated the change. If the parties still advocate partial or full exemption from liability, the people’s court will not support it.

(3) Strict legal application conditions

To accurately grasp the components of force majeure

The three most important characteristics of force majeure are unforeseeable, unavoidable and insurmountable, that is to say, if the epidemic has been foreseen or should be foreseen when the contract is concluded, or the epidemic prevention and control measures will affect the effective performance of the contract, it is still a choice If a contract is concluded, the force majeure clause cannot be invoked to exempt liability for breach of contract.

It is necessary to accurately grasp the causality and causality between the epidemic situation or the prevention and control of the epidemic situation and the failure to perform the contract, and comprehensively consider the impact of the epidemic situation on different regions, different industries, and different cases.

For example, in the case of Meng v. Zhongjia Travel Agency’s travel contract dispute, the court of first instance held that although there were “SARS” cases in our country at that time, the scope of the epidemic was very small and did not constitute a hazard to the daily life of the general public. The emergence of the epidemic serves as the basis for dismissal of the contract. In the case of a leasing contract dispute between a hotel company in Dalian and a company in Dalian [(2013) Liaoshen Ermin Kangzi No. 14], the court held that due to the SARS epidemic and the government’s suspension of wildlife operations The notice only affects part of the business activities of a Dalian company, but it is not enough to cause the lease contract with a hotel company to be “directly” or “not at all” to be performed. A company in Dalian fails to pay the rent within the contract period It constitutes a breach of contract and the force majeure clause cannot be applied. It can be seen that as soon as a contract dispute occurs during the epidemic or the rights and obligations of the contract are affected by the epidemic prevention and control measures, it should be considered that the provisions of the force majeure clause can be invoked, but it should be grasped in essence whether the epidemic is fundamentally shaken. The basis for contract performance.

To accurately grasp whether the parties have attributable causes

Article 3, paragraph 1, of the Opinions stipulates that if the parties have imputable reasons for the failure to perform the contract or the expansion of losses, they shall bear corresponding liabilities according to law. If the contractual obligations cannot be fulfilled due to the epidemic situation or the epidemic prevention and control measures, and the parties claim that they have fulfilled their obligation of timely notification, they shall bear the corresponding burden of proof. That is to say, although the epidemic is force majeure, it does not exempt the contracting parties from taking the initiative to reduce losses.

3. Conclusion

      Up to now, the current epidemic prevention and control in my country has achieved major stage results. The resumption of work and resumption of production are steadily proceeding, and the economic and social operation order is accelerating. On the one hand, civil and commercial trial activities, as an important regulator of social and economic order, should play a leading role in special periods, and provide strong judicial protection in the face of the epidemic's test for the whole society. On the other hand, the parties to the contract as citizens should also abide by the principle of good faith, refuse to abuse the force majeure clauses, try to resolve disputes through mediation, and save their judicial resources to contribute to the fight against the epidemic in special times.