Russia Related Sanctions—Helpful Guidance on the Proper Application of a Force Majeure Clause

7 June 2022
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Key takeaways:
  • Sanctions can be complicated and difficult to navigate. Please see the Debevoise & Plimpton LLP In Depth “Developments in Ukraine: U.S., UK and EU Sanctions and Export Controls”.
  • A force majeure clause may relieve a party from performance of its contractual obligations and any associated liabilities for non-performance in circumstances where performance has been prevented or delayed as a result of an event or circumstances beyond its reasonable control.
  • The meaning and effect of a force majeure clause will depend entirely on the specific wording. It is possible that the consequences of the parties being affected by sanctions have been directly catered for in the contract. Otherwise, parties should review their contracts to determine whether illegality / force majeure / material adverse change clauses have been triggered.
  • A party does not have to perform the contract otherwise than in accordance with the contract in order to avoid a force majeure event.
  • Care should be taken to notify a counterparty of an event of force majeure in accordance with the contractual requirements.