Abstract: The study examines the conjunctive conditions for exemption from liability under Article 79 of the Vienna Sales Convention (CISG), one of the fundamental documents of international trade, with special attention to economic disruptions caused by the global pandemic. By reviewing related 21st-century case law in the UNILEX and UNCITRAL databases, the paper points out that judicial practice evaluates the circumstances underlying requests for exemption extremely strictly and consistently upholds the principle of pacta sunt servanda. Considering that Article 79 of the Convention alone does not always provide sufficient protection during global crises similar to a pandemic, the inclusion of individual force majeure clauses in international sales contracts is of particular importance for the more effective distribution of risks.

Key words: CISG, force majeure, exemption from liability, pacta sunt servanda

Introduction

This study focuses on Article 79 of the Vienna Sales Convention, which is becoming increasingly significant in international trade, whilst examining the conceptual framework of force majeure. Fundamentally, it seeks to answer how the global economic and trade disruptions caused by the COVID-19 pandemic have affected international sales contracts, with particular regard to liability exemptions.

About force majeure, although this is a traditional concept with roots in Roman law, the unprecedented effects of the pandemic on the global economy have revived two classic concepts in international sales: vis maior and economic hardship[1].

The following terms appear in international contracts: force majeure, Act of God, vis maior. Their purpose is ‘to strike a balance between the principle of pacta sunt servanda and the fundamental principles of good faith and equity’[2].

1. Examination of Article 79 of the Vienna Sales Convention

Under the Convention, force majeure constitutes an unforeseeable and unavoidable obstacle. For exemption from liability, three conditions must be met cumulatively: a circumstance beyond the party’s absolute control, lack of foreseeability at the time of concluding the contract, and lack of reasonableness at the time of the breach.

Under the burden of proof for exoneration, the party causing damage through breach of contract bears the burden of proving the circumstances that exempt them from liability for damages. The mere fact that the cause lies outside the party’s sphere of control is not sufficient for exoneration; liability arises if the obligor could reasonably have been expected to take the obstacle into account at the time of concluding the contract. Similarly, the obligor cannot be exempted if it could reasonably have been expected of them to avoid or prevent the obstacle and its consequences. That is to say, if performance fails for a reason beyond the party’s control, but the obligor was aware of or ought to have been aware of the obstacle, they cannot be exempted from liability for damages[3]. A key issue is determining whether the party claiming exemption assumed the risk of the event giving rise to it. The obstacle must be an unmanageable risk or a wholly exceptional circumstance to justify an exemption on the basis of a force majeure event[4]. The legislation deliberately and clearly separates the exemption from the fault of the party in breach of contract[5]. This view in the literature is reinforced by case law, as cases where liability can be exempted are very rare[6].

The COVID-19 pandemic has had a significant impact on international trade worldwide. Among the problems caused by restrictions on economic activities and disruptions to supply chains, the question of whether a party can be excused from the consequences of failing to fulfil its contractual obligations stands out[7]. The concepts of unforeseeability and inevitability must be assessed in light of the COVID-19 crisis’s uniqueness and severity. The tragic scenario caused by the pandemic, affecting the entire global economy, could not have been foreseen, and traders were unable to avoid its consequences[8].

Exemption from liability may only be granted in the exceptional case where the obstacle exceeds the general risk inherent in the obligation to perform. Where the debtor’s ability to perform is restricted by the direct consequences of the pandemic, for example, through widespread illness among employees, this constitutes an obstacle beyond the debtor’s control. Indirect restrictions, such as government measures (e.g. restrictions on the import or export of goods), may also be classified as such[9]. Although government measures were effective, they constituted a significant intervention in the functioning of the global economy; the consequences did not spare international trade in goods either, hindering the performance of international contracts in numerous ways[10]. As regards the second condition set out in the Convention, the question arises as to whether the COVID-19 pandemic meets the test of foreseeability. This test must be carried out in accordance with the requirement of reasonableness, taking into account the specific circumstances of the case in question. It should be emphasised that the past occurrence of a particular obstacle may make its possible recurrence foreseeable[11]. However, the government measures taken to combat the COVID-19 pandemic were simply extraordinary and unprecedented, whilst the dimensions of space and time play a decisive role[12]. Reasonableness is also a key element in relation to the third condition: the debtor is obliged to make every reasonable effort – even if this results in high additional costs – to maintain their ability to perform to the greatest extent possible despite the obstacle. The only exception is where the very existence of the debtor’s entire business is at risk[13]. In 2001, the Convention Advisory Board was established with the participation of international experts and legal scholars; it issues opinions to promote uniform interpretation. Regarding Article 79, the Board notes that both sellers and buyers invoke this provision, citing a wide range of obstacles, with limited success. Although the wording leaves considerable scope for judicial discretion, the available judgments do not give cause for concern that the parties might be too easily relieved of their obligations[14].

2. Related issues arising in case law

In line with the research topic of this study, I used the UNILEX and UNCITRAL databases to search for legal cases arising in the 21st century and relating to Article 79 that contain references to force majeure. No reference to the pandemic appeared in the context of exemption; no legal disputes of this nature relating to the application of the Convention are currently found in these databases[15].

Following the examination, the following conclusions can be drawn. An important finding in one case is that if the buyer’s conduct was the reason why the seller failed to deliver the goods, the buyer cannot invoke the force majeure clause[16]. Case law clearly holds that if the circumstances invoked (e.g. new regulations restricting imports) did not render performance of the contract impossible, there is no scope for exemption[17]. In a specific case, the buyer claimed a breach of contract due to the seller’s failure to deliver the goods. The seller argued that the failure to perform was due to force majeure, as rail transport was precluded by the port unexpectedly freezing over at the time of delivery. As the contract did not contain an express force majeure clause, the court applied a three-step test under Article 79 of the Convention: (1) was there an impediment, (2) did the impediment render performance impossible, and (3) was the impediment foreseeable. As questions of fact arose as to whether the early freezing of the harbour impeded the seller’s performance and whether it was foreseeable, the court dismissed the buyer’s application for a summary judgment, whilst noting that the seller’s defence of force majeure might be well-founded[18].

The court’s ruling also emphasised that the seller cannot rely on force majeure to excuse its failure to perform if it could reasonably have circumvented the newly introduced government regulations concerning the certification of chicken meat entering the country. The goods could, in fact, have been transported to another country in the manner proposed by the buyer[19]. Based on the aforementioned conditions for exemption, the court expects the seller-producer to take all possible weather conditions into account when concluding the contract. If, due to extreme weather, the quantity and quality of the crop are lower than in previous years, the court considers the main issue to be whether it can be substantiated by expert opinion that it has become impossible to achieve at least 90% of the crop yield compared to previous years. If this is confirmed, the circumstances referred to may qualify as force majeure[20]. In a case forming the basis of a ruling, the seller assessed the change in legislation as having made it impossible to obtain the necessary permits, i.e., an export ban had come into force, based on which the seller is exempt from liability. Given that the Convention allows the parties to deviate from its provisions in their contract, the court confirmed in this regard that where the parties deviate from Article 79, which is of a ‘force majeure clause’ nature, the contractual terms take precedence[21]. I see the significance of the case in the fact that, based on the research criteria set out earlier, this was the only instance within the scope of the study in which the court found that the circumstance invoked by the seller resulted in the seller’s exemption under both Article 79 of the Convention and the force majeure clause.

One particular case decision serves as a striking example that a price increase and the supplier’s suspension of production do not constitute grounds that qualify as an exculpatory obstacle. As a general rule, the seller bears the risk that its supplier will suspend production and delivery due to technical problems in the manufacturing process and the continuous rise in the price of raw materials[22].

Case No. 1886 in the UNCITRAL case law database emphasised that if a party seeks to be excused from contractual liability because it has been affected by an epidemic or by measures aimed at preventing or containing an epidemic, the Chinese People’s Court shall examine the claim in accordance with the relevant provisions of Article 79 of the Convention and strictly assess the applicable conditions set out in that article. The provisions of the Convention must be interpreted in accordance with the ordinary meaning of the terms in the context of the Convention, having regard to its objectives. At the same time, it should be noted that case law relating to the Convention does not form an integral part of the Convention; it may be used as a reference during the hearing of cases, but not as a legal basis[23].

Some legal scholars argue that Article 79 of the Convention is not necessarily of use to parties involved in international transactions who have faced or are facing difficulties as a result of the COVID-19 pandemic. Parties are afforded a greater degree of protection if – given the dispositive nature of the legislation – they include relevant provisions in their international sales contracts. The most important of these is the force majeure clause. In light of the COVID-19 pandemic, several organisations have updated their force majeure clauses. Parties involved in international sales transactions must be aware that Article 79 of the Convention may not, on its own, be sufficient to protect against obstacles and difficulties. Drafting a separate force majeure clause may be more suitable for meeting specific needs[24]. International literature also emphasises the application of the International Chamber of Commerce (ICC) 2020 model clauses on force majeure and hardship, which prescribe precise protocols for renegotiation and the restoration of the contractual balance, i.e. the sharing of risks and the management of force majeure events[25]. Global crises highlight the importance of clearly drafting contractual terms, particularly those relating to unforeseeable events. Parties are increasingly turning to individually drafted force majeure and hardship clauses to address potential issues arising from the application of Article 79 of the CISG[26].

Conclusions

An examination of the case law relating to Article 79 of the Convention reveals that courts impose strict requirements regarding the nature and consequences of the impediment for the circumstance to be regarded as a defence under the Article. In summarising the analysis of the relevant judgments, I agree with Sarolta Szabó’s position: the concerns that the courts readily exempt a party from the obligation to perform were unfounded[27]. It can also be stated in an international context that, reassuringly, the principle of pacta sunt servanda does not appear to be weakening.

---

[1] Hossein Kaviar, Mohammad Hossein, Taghipour Darzi Naghibi, Exemption from Liability under International Contracts in the Age of COVID-19: A Perspective from the Convention on the International Sale of Goods (Vienna 1980), Journal of Legal Research, 2024/105. p. 153.
[2] Judit Glavanits, Diána Rácz, Szerződésszegő magatartások a Bécsi Vételi Egyezményben és az új Ptk.-ban [Breaches of Contract in the Vienna Sales Convention and the New Civil Code] Külgazdaság, Jogi melléklet [Legal Supplement] May–June 2014. p. 49.
[3] Andrea Csécsy, A szerződésszegés szabályozása az áruk nemzetközi adásvételi szerződéseiről szóló 1980. évi bécsi egyezményben [The regulation of breach of contract in the 1980 Vienna Convention on Contracts for the International Sale of Goods] Miskolci Doktoranduszok Jogtudományi Tanulmányai, 2002/1. p. 185.
[4] UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, United Nations, New York, 2016. p. 375.
[5] Tamás Sándor, Lajos Vékás, Nemzetközi adásvétel – A Bécsi Egyezmény kommentárja [International Sale – Commentary on the Vienna Convention] Budapest, HVG-Orac, 2005. p. 470.
[6] Éva Török, A vis maior fogalmának XXI. századi keretei a szerződési jogban [The 21st-century framework of the concept of force majeure in contract law] Jogtudományi Közlöny, 2024/4. p. 99.
[7] André Janssen, Christian Johannes Wahnschaffe, COVID-19 and international sale contracts: unprecedented grounds for exemption or business as usual? Uniform Law Review, 2020/4. p. 466. Available here.
[8] Klaus Peter Berger, Daniel Behn, Force Majeure and Hardship in the Age of Corona: A Historical and Comparative Study. McGill Journal of Dispute Resolution. 2019–2020/4. pp. 129–130. Available here.
[9] André Janssen, Christian Johannes Wahnschaffe, op. cit. pp. 469-470.
[10] André Janssen, Christian Johannes Wahnschaffe, op. cit. p. 495.
[11] André Janssen, Christian Johannes Wahnschaffe,: op. cit. pp. 470-471.
[12] André Janssen, Christian Johannes Wahnschaffe, op. cit. pp. 472-473.
[13] André Janssen, Christian Johannes Wahnschaffe, op. cit. p. 474.
[14] CISG Advisory Council, Opinion No. 7 Exemption of Liability for Damages Under Article 79 of the CISG. 2007. pp. 2–3. Available here.
[15] va Török: A vis maior fogalmának XXI. századi keretei a szerződési jogban [The 21st-century framework of the concept of force majeure in contract law] Jogtudományi Közlöny, 2024/4. p. 99.
[16] CLOUT case 1101.
[17] CLOUT case 976.
[18] 03 C 1154, USA, 6 July 2004. CLOUT case 696.
[19] 08 Civ. 114 (SAS), USA, 16 April 2008.
[20] 120428 / HA ZA 07-550, Netherlands, 09-07-2008.
[21] CLOUT case 1405.
[22] 1527/2021 (Final Award), Egypt, 19 February 2023.
[23] CLOUT case 1886.
[24] Lok Kan So, Poomintr Sooksripaisarnkit, Sai Ramani Garimella, COVID-19 in the Context of the CISG: Reconsidering the Concept of Hardship and Force Majeure. In: Balkan Yearbooks of European and International Law 2020. 2021. pp. 117–118. Available here.
[25] Antônio Márcio Da Cunha Guimarães, Miguel Souza Dantas Neto, Marcio Pugliesi, Manuel David Masseno, Covid-19 and the Contractual Performance Crisis in International Contracts Governed by the Vienna Convention on Contracts for the International Sale of Goods (CISG). Revista Jurídica, 2021/2. p. 179.
[26] Başak Başoğlu, Kadir Berk Kapancı, The Impact of Force Majeure on Contracts for the International Sale of Commercial Goods Under Article 79 of the CISG, Annales de la Faculté de Droit d’Istanbul Annales 2025. p. 165. Available here.
[27] Sarolta Szabó, A Bécsi Vételi Egyezmény, mint nemzetközi lingua franca – Az egységes értelmezés és alkalmazás újabb irányai és eredményei [The Vienna Sales Convention as an international lingua franca – Recent trends and outcomes in uniform interpretation and application] Budapest, Pázmány Press, 2014. 215.

---

Éva Török, PhD
Assistant Professor, University of Debrecen, Faculty of Law