Impact of Covid-۱۹ on contractual relationships in the area of international trade

One of the essential themes in the realm of international trade is contractual relationships which is a crucial requirement in the social life. Thus, analyzing worldwide alterations caused by the Covid-۱۹ pandemic in economic and commercial spheres, in particular, contract law is a must. During the Covid-۱۹ pandemic; change of circumstances, which includes applying restrictions and interdictions in internal trade of countries as well international trade, has been impactful on exports and imports, international payment, international finance and insurance, also transport in contractual relationships. This impact has been in such a way that determines performance of contractual obligations. Here, the basic question is that in spite of the universal accepted legal principles as fundamental principle of sanctity of contracts (“pacta sunt servanda”) and the doctrine of contract maintenance, the promisor during the corona virus pandemic are exempt from performance of contractual obligations in international trade? In other words, the Covid-۱۹ is considered utterly as a case of force majeure? Or, in some conditions and circumstances does it bring merely hardship? It seems, those contracts which their performances do not face governmental preventions and limitations and just their performances are caused hardship and onerous expenses, cannot be considered as a case of force majeure; so it does not cause exemption of contracting parties from performance of contractual obligations. As in February ۲۰۲۰ Supreme Court of Zhejiang province of China issued a directive about not being accepted dissolution of a contract provided its performance during the Covid-۱۹ is possible. Also, in Iranian judicial system the case is the same. But based on judicial system of some countries, if the corona virus pandemic just renders hardship situations in a contract, the contracting parties are allowed to modify their contract obligations. Yet, in some countries, such as France, China and India, the consequences emerged by the Covid-۱۹ pandemic are considered as force majeure instances. However, based on Iranian judicial system force majeure is recognized under triple conditions of external event, inevitable event, and unforeseeable event; then, consequences emerged by the corona virus pandemic can be regarded as contractual excuses and as force majeure cases. It is suggested that the Covid-۱۹ pandemic in addition to its effectiveness on international trade during the Covid-۱۹ pandemic, no doubt its consequences in the world post-Covid-۱۹ are expectable.

Keywords:

contractual relationships , COVID-۱۹ pandemic , force majeure , hardship , international trade