Non-performance of contractual obligations in international commercial contracts in the wake of coronavirus: A legal perspective

Abstract

The rapid growth of the Coronavirus disease (COVID-19) has undoubtedly impacted business relations worldwide, leading to significant consequences caused by the non performance of international commercial contracts. Given the circumstances, the current study scrutinises how the international commercial law can provide relief for non performance of contractual obligations due to the impact of the COVID-19 crisis through legal instruments such as the United Nations Convention on Contracts for the International Sale of Goods (CISG) and UNIDROIT Principles of International Commercial Contracts (UNIDROIT Principles). This research was conducted following the doctrinal legal research methodology. Examining the CISG and the UNIDROIT Principles revealed that the legal concepts such as force majeure and hardship could be invoked to grant relief. The study finds that the COVID-19 Pandemic will provide the legal basis to invoke these measures depending on different factors such as the duration of impediment, allocation of contractual risks, causal link and the date of signing the contract. In conclusion, the relief provided by these international instruments is likely to be constructed based on the judicial precedent established during comparable circumstances in the past, such as the outbreak of the Severe Acute Respiratory Syndrome (SARS).