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Force majeure situation

 force majeure

The situation

Company A – a Ukrainian producer of agricultural products concluded a contract for the supply of grain crops with company B – a trader from the Netherlands.

Company A did not fulfill its obligations under the contract due to force majeure. Namely, the representative of company A declared the impossibility of fulfilling the obligation due to the drought.

To confirm force majeure, company A sent company B a certificate from the Ukrainian hydrometeorological center.

Company B did not agree with the arguments of Company A. Company B appealed to the court with a demand for compensation for damages caused by Company A’s failure to fulfill its obligations.

Questions:

  1. Is the drought a force majeure or a normal (predicted) business risk?
  2. What evidence should be used to confirm the existence of force majeure circumstances?
  3. Imagine yourself as a judge and decide a possible dispute between company A and company B.
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By Volodymyr Machuskyy

Prof. at Kyiv National Economic University