BUSINESS LAW

Contract performance: force majeure and hardship

Rising costs, insufficient liquidity and inability to perform are subject to different legal rules. The contract, the cause of the difficulty and the evidence determine whether obligations may be renegotiated, adjusted, suspended or terminated.

Murar și Asociații3-minute read

The contract is the starting point

Before any notice, check the specific obligation, due date, risk clauses, penalties, notification mechanism and termination conditions. A force majeure clause may require deadlines and documents whose omission affects the contractual position.

For international contracts, governing law and the agreed court or arbitration must be checked separately. The Romanian Civil Code cannot be assumed to govern every contract of a Romanian company.

Force majeure requires more than economic difficulty

Under Article 1351 of the Civil Code, force majeure requires an external, unforeseeable, absolutely insurmountable and unavoidable event. The assessment concerns its effect on the specific obligation and causation; the existence of a crisis does not, in itself, establish these conditions.

Insufficient funds, falling sales or ordinary cost increases do not automatically justify non-payment. Nor does a certificate confirming an event replace contract analysis and proof of the alleged impossibility. Effects may differ according to the impediment’s duration and extent.

Hardship and adjustment of the contract

Article 1271 starts from the duty to perform even where performance has become more onerous. Judicial adjustment or termination for hardship requires additional conditions, including an exceptional change of circumstances making performance excessively onerous and the obligation manifestly unjust.

The timing of the change, foreseeability, allocation of risk and a good-faith attempt to negotiate within a reasonable time matter. A request to renegotiate does not unilaterally amend the agreement or automatically suspend payment.

Negotiations should lead to a written agreement with clear obligations

An agreement may provide a new timetable, temporary reduction of performance, additional security or agreed termination. It should address debts already due, penalties and rights retained.

Remote communication can support negotiations, but signatory identity, authority and formal requirements remain essential. For transactions with special form requirements, an informal email exchange may be insufficient.

A decision based on evidence and commercial consequences

Prepare the contract and annexes, an event chronology, notices, evidence of performance, costs and reasonable mitigation measures. These allow a negotiated outcome to be compared with litigation risks.

Murar și Asociații assists companies with contract negotiation and performance, managing difficulties and resolving disputes, including international relationships. The strategy considers both legal protection and continuity of the commercial relationship where it remains useful.

Useful questions

Does force majeure extinguish every debt?

No. The affected obligation, cause, contract and statutory effects must be assessed. Obligations already due or still capable of performance may be treated differently.

Can I reduce the price myself because costs have risen?

There is no general right to amend terms unilaterally. A solution may arise from the contract, a mutual agreement or, subject to statutory requirements, a court decision.

Legal sources

This analysis provides general information by reference to the sources and date stated. Advice on a specific situation depends on the documents, applicable law and any transitional rules.

Related legal services

THE NEXT STEP

Let’s discuss
your legal needs.

Tell us about the matter for which you need legal assistance. We will discuss the options, the steps required and the terms of our engagement.

Request a consultation