Force majeure supposes an impediment; hardship supposes performance that has become ruinous but remains possible. Confusing the two loses the case. In French law, Article 1218 of the Civil Code releases a debtor who is prevented from performing, and Article 1195 opens a renegotiation where circumstances change unforeseeably, but it is a default rule and is excluded in most commercial contracts. And in every case, a monetary debt is not extinguished by force majeure.
A French components manufacturer undertakes to supply sub-assemblies to a foreign carmaker for three years at a firm price. Eighteen months later a critical component becomes unobtainable after its Asian supplier is designated under sanctions, and the price from the replacement source has tripled. The contract contains a fifteen-line force majeure clause taken from a precedent, listing war, fire, flood and strike. Neither sanctions, nor supply failure, nor a price increase appears anywhere in it.
Two mechanisms that must not be confused
Force majeure deals with the impossible, hardship with the ruinous. Article 1218 of the Civil Code defines force majeure in contract as an event beyond the debtor’s control, which could not reasonably have been foreseen at the time of conclusion and whose effects cannot be avoided by appropriate measures, preventing performance of the obligation. Three cumulative conditions, and one central verb: prevent.
Article 1195 addresses something different: a change of circumstances unforeseeable at the time of conclusion which makes performance excessively onerous for a party who had not accepted that risk. Performance remains possible; it becomes unbearable. The party may request renegotiation while continuing to perform during it. If renegotiation fails, the parties may agree to terminate or jointly ask the court to adapt the contract, and failing agreement within a reasonable time the court may, at the request of one party alone, revise the contract or bring it to an end.
What Article 1218 does not say
The regime of effects is binary. If the impediment is temporary, performance is suspended unless the delay justifies termination. If it is permanent, the contract is terminated by operation of law and the parties are released, with restitution. The text says neither how long a temporary impediment must last before it becomes permanent, nor how advance payments, work in progress and costs already incurred are to be dealt with, beyond a cross-reference to Articles 1351 and 1351-1.
That gap is exactly what the clause must fill, and exactly what copied clauses never fill. It needs a notification period and a sanction for failing to observe it, a duration threshold opening a right to terminate, the fate of sums already paid, and a documented duty to mitigate. Silence hands the question to a judge’s assessment several years later, on facts nobody will have preserved.
Article 1195 is a default rule, and almost without case law
The report to the President of the Republic accompanying the Ordinance of 10 February 2016 says so expressly: the parties may agree in advance to exclude Article 1195. That exclusion has become a boilerplate clause in commercial contracts, often inserted without the choice being a conscious one. Yet excluding hardship without stipulating a replacement clause means placing the entire risk of increased cost on the debtor, which is almost never the real intention.
One further observation few drafters weigh: ten years after it came into force, Article 1195 remains almost untouched by any decision of the Court of Cassation, including after the energy crisis. The legislature has moreover excluded it for securities transactions and financial contracts, by Article L. 211-40-1 of the Monetary and Financial Code, an exclusion held constitutional. Counting on judicial revision of a contract therefore remains, even today, a wager.
Monetary debts escape force majeure
This is the least known and most expensive rule. The Commercial Chamber held that a debtor of an unperformed contractual obligation to pay a sum of money cannot escape that obligation by invoking force majeure (Cass. Com., 16 September 2014, No 13-20.306). The Third Civil Chamber repeated the formula word for word and applied it to commercial rents whose payment had been made impossible by public health measures (Cass. 3rd Civ., 15 June 2023, No 21-10.119).
Two corollaries follow. First, a clause which does not expressly distinguish monetary obligations from obligations in kind will never protect the buyer or the debtor of the price. Second, force majeure is not a risk-sharing mechanism: the Court of Cassation holds that a creditor who has been unable to enjoy the performance he was entitled to cannot obtain termination by invoking force majeure (Cass. 1st Civ., 25 November 2020, No 19-21.060). The frustrated creditor must therefore be dealt with by a separate clause.
Sanctions and embargoes: what they paralyse and what they do not extinguish
The full court of the Court of Cassation held that an asset freeze applied under a Union regulation constitutes a circumstance beyond the debtor’s control preventing performance, which allows the five-point increase in the statutory interest rate to be set aside and suspends limitation for impossibility of acting (Cass. Ass. plén., 29 April 2022, No 18-18.542). The exact scope of that decision deserves close reading: it neutralises accessories and time limits; it does not extinguish the debt.
English case law has decided a neighbouring question with the same rigour. Faced with a charterparty whose dollar payments had been made impracticable by US sanctions, the Supreme Court of the United Kingdom held that the reasonable endeavours obligation stipulated in the force majeure clause did not require acceptance of a performance not conforming to the contract, here payment in euros together with an indemnity for the exchange difference (RTI Ltd v MUR Shipping BV, 2024). A party relying on a reasonable endeavours proviso should therefore not assume that it obliges the other side to accept a workaround.
The ICC model clause and the hundred and twenty day threshold
The force majeure clause published by the International Chamber of Commerce in 2020 proceeds in the opposite order to most in-house clauses: it first states a general definition with three conditions, then lists seven categories of presumed events, among them currency and trade restrictions, embargo and sanctions, acts of authority, epidemics and natural disasters, and prolonged failures of transport, telecommunications or energy. The point to retain is that the presumption covers only the external and unforeseeable character of the event: the affected party must still prove that it could neither avoid nor overcome the effects.
The clause then organises notice without delay, the effects, temporary impediment, a duty to mitigate, a right to terminate where the impediment exceeds one hundred and twenty days, and the treatment of performance received before termination. The hardship clause in the same series offers three options which have to be chosen at the drafting stage: unilateral termination by the party invoking it, a power given to the judge or arbitrator to adapt the contract or bring it to an end, or a power limited to termination. That choice is the real strategic decision, and it is almost always made by default.
The applicable law changes everything
The Rome I Regulation submits to the law of the contract the performance of obligations, the consequences of breach and the ways of extinguishing obligations. The characterisation of the event, the extent of the exoneration, the burden of proof and the regime of restitution therefore depend on the law chosen, and the same clause will not produce the same effect read by a French judge, by an arbitrator applying the UNIDROIT Principles or by an English court. English law knows nothing of hardship and knows only frustration, which extinguishes the contract without ever adapting it and is not triggered by increased cost alone.
Two points complete the picture. Where the sale falls under the Vienna Convention, its Article 79 exempts only from damages, leaves the reduction of the price and avoidance intact, and requires a notice whose absence is sanctioned in itself: a clause drafted on the French model derogates from it without always saying so. And Article 9 of the Rome I Regulation preserves the overriding mandatory provisions of the forum, which apply whatever the parties chose, so a clause cannot immunise a party against a sanctions regime the forum applies of its own motion.
What the firm does
The firm drafts and reviews force majeure and hardship clauses for companies with long-term international supply commitments, starting from the events that would actually disrupt their business, sanctions, supply failure, tariff shocks, energy and transport, rather than from a list of fires and floods. That review sets the notice period, the duration threshold opening termination, the treatment of monetary obligations, the duty to mitigate and the fate of advance payments, and it is done together with the governing law clause, because the same wording produces different results under different laws.
Where an event has already occurred, the firm establishes whether the conditions are met on the documents, sends or answers the notice within the contractual time limit, and organises the evidence of the impediment and of the mitigation efforts, which is what the dispute will ultimately turn on. It also handles the related questions: suspension or termination, restitution of sums paid, and the interaction with an asset freeze or an export prohibition. A first assessment is normally possible within a few days on the strength of the contract and the correspondence.
Does your force majeure clause cover sanctions, supply failure and tariff shocks, or only fire and flood? The firm rewrites it around the events that would actually stop your business.
Frequently asked questions
Is a sharp price increase a case of force majeure?
No. Article 1218 of the Civil Code requires an event preventing performance, and a price increase makes performance more expensive without making it impossible. The situation falls instead within hardship under Article 1195, which allows renegotiation where performance has become excessively onerous for a party who had not accepted that risk. But Article 1195 is a default rule and is excluded in most commercial contracts, so the answer usually depends on what the contract says.
Can force majeure be invoked to avoid paying?
No. The Commercial Chamber held on 16 September 2014 that a debtor of a contractual obligation to pay a sum of money cannot escape it by invoking force majeure, and the Third Civil Chamber applied the same rule to commercial rents on 15 June 2023. A clause that does not expressly distinguish monetary obligations from obligations in kind will therefore not protect the party who owes the price.
Do international sanctions extinguish the debt?
No. The full court of the Court of Cassation held on 29 April 2022 that an asset freeze under a Union regulation is a circumstance beyond the debtor’s control preventing performance, which sets aside the five-point increase in the statutory interest rate and suspends limitation for impossibility of acting. It neutralises accessories and time limits; the principal remains due and becomes payable again once the freeze is lifted or a derogation is granted.
How long must an impediment last to allow a party to exit the contract?
Article 1218 says only that a temporary impediment suspends performance unless the delay justifies termination, and that a permanent one terminates the contract by operation of law. It fixes no duration. That is why a threshold has to be stipulated: the ICC model clause of 2020 opens a right to terminate where the impediment exceeds one hundred and twenty days, which is a workable reference point for a contract that has none.
Does a force majeure clause protect against overriding mandatory rules?
No. Article 9 of the Rome I Regulation preserves the overriding mandatory provisions of the forum, which apply whatever law the parties chose and whatever the contract stipulates. A clause cannot authorise a party to perform what a sanctions regime prohibits, and it cannot prevent a court from applying that regime of its own motion. What the clause can do is allocate between the parties the consequences of that prohibition.
Further reading: sanctions against Russia, governing law and jurisdiction clauses, the Vienna Convention on the international sale of goods.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and is no substitute for advice on your own matter.