North Macedonia: Force Majeure - Hardship in relation to Conflict and Sanctions

There is no legislation on war or related sanctions. However, the Macedonian Law on Contracts and Torts (“MLCT”) have general clauses for force majeure for cases “where neither of the parties is responsible for impossible performance” (Article 126) and where “the debtor is not liable anymore” (Article 252). 

Article 126 of the MLCT states that where performance of an obligation of a party of a contract becomes impossible due to an event for which neither party is responsible, that occurred after the conclusion of the contract and prior to the maturity of the obligation and could not be predicted, prevented, avoided or eliminated by either contractual party in the period of conclusion of the agreement, the obligation of the other party shall be canceled, and if it has performed the obligation partially or fully, it is entitled to request restitution according to the relevant regulation. In case of partial inability of one party to perform due to an event for which neither of the parties is responsible, the other party may cancel the contract, provided that it complied with the partial performance. Otherwise, the contract shall remain valid, and the other party will be entitled to request proportional reduction of its obligation.

Article 252 of the MLCT states that a debtor will not be liable for damage where it can prove that it could not perform its obligation or that it is late with the performance due to circumstances that arose after entering into the contract that it could not prevent, eliminate or avoid.

If performance is impossible due to acts of war and/or sanctions, it can be argued that it constitutes force majeure under the statutory provision. The general notion is, however, that force majeure should be directly related and affect the specific non-performance.

In general, contracting parties are free to regulate force majeure clauses. (Statutory provisions on force majeure are dispositive law). However, the practice also shows that in most of cases the parties define what they consider as force majeure in the contract. In most such cases, the period in which the other party should be notified and the specific cases in which force majeure can take place is defined. The parties are free to regulate such clauses, provided that general rules on obligations are complied with. This includes the basic principle of fairness.

We recommend including a well-drafted force majeure clause since such a clause will provide a better starting position and prevent conflicts. 

In addition, the MLCT only defines “unforeseen circumstances” in relation to construction contracts. In this situation, unforeseen work is work whose undertaking is necessary in order to ensure stability of a building or to prevent damage, and was caused by the unexpectedly hard quality of the soil, caused by unforeseeable events (i.e. due to prevention of damages in the stated cases or following an order by the competent state bodies). 

North Macedonia is not a EU member state yet. However, in most of the cases it supports sanctions imposed by the EU. If the law of another country is declared applicable, the court of that country will also have jurisdiction (in most cases).

Probably, yes.

It makes sense to include tailor-made force majeure and unforeseeable circumstances clauses in each contract. When drafting such clauses, the specifics of the transaction and of the parties should be considered. Hence, It is recommended that force majeure clauses be drafted on a case–by-case basis.