Serbia: Fulfilment of Contracts in Corona-19 Pandemic Circumstances

Coronavirus pandemic has caused impediments in the performance of numerous international and domestic contracts worldwide. Serbian law prescribes conditions („rebus sic stantibus”, Art. 133­136 of Law on Obligations) for the annulment of contracts before court or adjustment of the contracts to fair terms, provided there is an excessive burden in the performance and other hardship conditions are met. Further to this, Serbian law also foresees the ex lege termination of the contract („Force Majeure”, Art. 137 of Law on Obligations) in cases when the complete impossibility of performance occurs, as well as out-of-court termination of the contract or its adjustments, in cases when partial impossibility of performance occurs and all other Force Majeure conditions are met. CISG is not dealing with force majeure and hardship clauses in line with the solutions of the Serbian law; it merely deals with liability for damages and exemption for the period during which the impediment exists (Art. 79 CISG). It is advisable to include force majeure and hardship contractual clauses into the contracts, dealing with the definition of force majeure, procedures if it occurs, exclusions of certain impediments and defining legal consequences thereof, bearing in mind the legal and business nature of the contractual relation and always in line with the principle of good faith.

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Ljubica Tomić

Attorney at Law | Managing Partner