Publication date: 25.06.2024
Peculiarities of concluding contracts and fulfilling obligations in time of war
Introduction
During war and martial law, legal relations between business entities undergo significant changes. This applies to both the conclusion of new contracts and the fulfillment of existing obligations. In this section, we will consider the main peculiarities of entering into contracts and fulfilling obligations in wartime.
The main part
Legal and regulatory framework
Legislative acts
Civil Code of Ukraine
The Civil Code regulates the general principles of contracting and fulfillment of obligations, including provisions on force majeure.
Law of Ukraine "On the Legal Regime of Martial Law"
This law establishes special rules and conditions for concluding contracts and fulfilling obligations during martial law.
Resolutions of the Cabinet of Ministers of Ukraine
The Cabinet of Ministers may adopt resolutions detailing the procedure for entering into contracts and fulfilling obligations under martial law.
Conclusion of contracts in time of war
Features of the contractual terms
Inclusion of force majeure clauses
Conclusion of contracts in time of war requires the mandatory inclusion of force majeure clauses that define the conditions for releasing the parties from liability in the event of unforeseen circumstances.
Flexibility of contract terms
Contracts should provide for the possibility of revising the terms and conditions in the event of changes in circumstances related to martial law, in particular with respect to the terms of performance, prices and other important parameters.
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Checking of counterparties
Risk assessment
Before entering into a contract, a thorough assessment of the risks associated with the counterparty, including its financial condition, reputation and ability to fulfill obligations in times of war, should be made.
Due diligence
Conducting due diligence of the counterparty, including analysis of its legal capacity and availability of necessary permits and licenses.
Fulfillment of obligations in time of war
Force majeure circumstances
Definition of force majeure
Military actions and other circumstances arising during the war may be recognized as force majeure, which releases the parties from liability for non-performance or improper performance of obligations.
Documentary evidence
In order to be released from liability due to force majeure, it is necessary to obtain a corresponding confirmation from the Chamber of Commerce and Industry or other authorized body.
Modification of liabilities
Negotiations with counterparties
In the event of circumstances that complicate the fulfillment of obligations, the parties should negotiate possible changes to the terms of the contract, in particular, the terms of performance, the scope of services or goods, prices, etc.
Alternative solutions
If it is impossible to fulfill the obligations in full, the parties may agree on partial fulfillment or provision of alternative services or goods.
Protection of the rights of the parties
Legal procedures
Arbitration and litigation
In the event of disputes over the performance of contracts in time of war, the parties may apply to arbitration courts or general courts to resolve conflicts.
Mediation and negotiations
Using mediation and negotiation as alternative dispute resolution methods can be an effective tool for reaching mutual understanding between the parties and avoiding lengthy litigation.
Compensation for damages
Determination of damages
In the event of non-fulfillment or improper fulfillment of obligations as a result of hostilities and force majeure, the parties have the right to claim damages. This may include direct damages, lost profits, and property restoration costs.
Settlement of insurance issues
If the company's property or operations have been insured, the parties may apply to insurance companies for compensation for damages caused by the hostilities. It is important to have all the necessary documents confirming the losses and to comply with the terms of the insurance contract.
State support
Legislative initiatives
Special legislative acts
The state may adopt special legislative acts regulating the peculiarities of concluding contracts and fulfilling obligations during martial law. This may include deferral of obligations, reduction of penalties and other support measures.
State support programs
Introduce government programs to support businesses affected by military operations. These may include grants, subsidies, soft loans and other forms of financial assistance.
Consulting and legal assistance
Counseling centers
Establishment of state advisory centers where businesses can get advice on concluding contracts and fulfilling obligations during the war, as well as assistance in preparing the necessary documents.
Legal assistance
Providing legal assistance to companies in matters related to fulfillment of obligations, dispute resolution and obtaining compensation for losses.
Conclusion.
The peculiarities of concluding contracts and fulfilling obligations in time of war require companies to pay increased attention to the terms of contracts, and
careful risk assessment and flexibility in negotiations. It is important to consider the possibility of force majeure and have a contingency plan in place. Government support and the effective use of legal instruments can greatly facilitate the process of adapting businesses to martial law and help maintain their stability and development.
