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International contracts have changed with emergencies from Covid or Brexit.

In times of emergency caused by events that do not depend on the will of individual companies, but which can be caused either by pandemic events such as Covid, which has blocked trade between countries for months, or by political events such as Brexit, which changed the import/export rules at the UK/EU border, it is […]

In times of emergency caused by events that do not depend on the will of individual companies, but which can be caused either by pandemic events such as Covid, which has blocked trade between countries for months, or by political events such as Brexit, which changed the import/export rules at the UK/EU border, it is necessary to understand how should be regulated the International conventions and agreements . In practice, the companies, especially the more structured ones, have explored all the worst scenarios to understand what are the positions of strength or weakness with respect to partners and customers, when events of this kind occur.

International contracts have changed with emergencies from Covid or Brexit.

International contracts may contain and provide for specific clauses including force majeure. But we don’t always think about including them in obligations. “Alternatively – says lawyer Irene Damiani of Damiani & Damiani International Law Firm in Italy – a thorough legal examination must be carried out to understand what the laws of the countries of international contractors are, which provide for scenarios of this type

The advice of a lawyer experienced in international commercial law is to identify beforehand and clearly, the clauses to be included in the international contract to prevent any type of problem, even exceptional ones such as pandemic or brexit. 

In cases of this kind, the situations that law firms face are the most varied. There may be a company that is no longer able to quickly make complex payments with employees also located in areas other than those where it is usually based or who are in smart working. Or there may be the case of the advertising campaign already paid for and destined for the shopping streets of the big fashion cities, in Italy or France, or in London, which however in fact no one can see due to force majeure, as happened during the periods unpredictable lockdowns. 

There may be delays in delivery of goods due to sudden changes in trade agreements between Countries, such as in the case of Brexit. Untangling the tangle of government prohibitions, obligations and responsibilities of individuals and companies is not easy and, above all, it is an exercise that must be carried out on a case-by-case basis, contract in hand, because in some legal systems, such as that of Italy, there is no ‘is a detailed definition of what is meant by force majeure.

The international business relations governed by English law.

Everything is more complicated for contracts with foreign suppliers and partners. The most used type of international contract is governed by English law, which does not allow for a flexible interpretation of international contractual clauses. Some British commentators have been skeptical of the application of the concept of force majeure to the situation caused by the Covid pandemic. Others believe that in order to make the most of the difficulties suffered by extraordinary events which did not allow compliance with the provisions of the contract, such as delivery times, or unforeseen expenses for customs, the clause to which reference should be made should already be included in the contract concluded. For example, in contracts signed before Covid or before Brexit, the contract should have included an epidemic or the prohibitions and changes in the import / export rules. 

The problem of the sudden change in international regulations affects all commercial sectors. Some are more affected than others. For example, tourism after Brexit has seen more restrictive entry into the UK for men and goods, which have changed due to the UK’s exit from the EU. 

It was precisely these two events, Covid and Brexit, that prompted international commercial law experts to include extraordinary clauses in addition to the ordinary ones already known in contracts with foreign partners. Only with clauses of this type is it possible to protect one’s customers well, with respect to the commitments undertaken with foreign customers and suppliers.