Publication date: 08.06.2024
Peculiarities of concluding and executing business contracts under martial law
Introduction
The imposition of martial law in Ukraine creates specific conditions for doing business. In these conditions, businesses face new challenges and risks that affect the conclusion and performance of commercial contracts. In this article, we will consider the main features of legal regulation of commercial contracts under martial law.
Legal framework
The Constitution of Ukraine:
- Guarantees fundamental rights and freedoms of citizens, even under martial law, although certain rights may be restricted.
Law of Ukraine "On the Legal Regime of Martial Law":
- Defines the legal basis for the introduction and operation of martial law, including restrictions that may be applied to economic activity.
Commercial Code of Ukraine:
- Regulates general issues of entering into and performing commercial contracts that remain in force even under martial law.
The Civil Code of Ukraine:
- Contains provisions on obligations and consequences of non-fulfillment of contracts, which also apply under martial law.
Conclusion of commercial contracts under martial law
Force majeure circumstances:
- Martial law and related events may be recognized as force majeure. This means that the parties may provide for provisions in the agreement to release them from liability for failure to fulfill their obligations in the event of such circumstances.
Terms of contracts:
- When entering into contracts under martial law, the terms and conditions relating to the terms of performance, liability for non-performance and the possibility of changing the terms of the contract due to force majeure should be formulated with particular care.
Ensuring the fulfillment of obligations:
- Companies may require additional guarantees and collateral to minimize the risk of default, such as bank guarantees, risk insurance, etc.
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Execution of commercial contracts under martial law
Delays in execution:
- Martial law may lead to delays in fulfilling obligations due to disruption of logistics chains, mobilization of employees or other objective reasons. In such cases, it is important to document all circumstances that affect the performance of the contract.
Changing the terms of the contract:
- The parties may agree to change the terms of the agreement in connection with the occurrence of force majeure. This may include an extension of the terms of performance, a change in the scope of obligations or other conditions.
Termination of the contract:
- If it is impossible to fulfill the contract due to martial law, the parties may terminate the contract by mutual agreement or in court.
Protection of the rights and interests of the parties
Recognition of force majeure:
- Companies can apply to the Ukrainian Chamber of Commerce and Industry to obtain certificates confirming the occurrence of force majeure.
Judicial defense:
- In the event of disputes regarding the fulfillment of obligations under martial law, the parties may apply to the court to resolve conflicts. The court will take force majeure into account when making its decision.
