Expert Guide on Force Majeure and Unforeseen Circumstances in the Context of Global Trade War in Germany

There is no provision in German statutory law that expressly defines force majeure events. Hence, the imposition of import tariffs could only be covered by the general statutory provisions on impossibility of performance (section 275 German Civil Code (BGB)), and by provisions providing for the right to request amending contracts due to changed circumstances which significantly interfere with the basis of the transaction, (section 313 German Civil Code, see next question).

As the delivery of the products is not impossible due to the imposition of import tariffs (just more expansive), Section 275 BGB would generally not apply. Price increases (even if they are significant) are typically not considered to be force majeure events under German law.

In existing contracts, in which import tariffs are not explicitly mentioned as a force majeure event, the imposition of import tariffs may, in general, not be covered by a generic force majeure clause.

German law provides for a kind of "hardship clause" in section 313 German Civil Code which provides for the right to request amending a contract due to changed circumstances which significantly interfere with the basis of the transaction.

A significant interference with the basis of the transaction could, in principle, apply to imposed substantial import tariffs. However, German courts do apply very strict benchmarks in this regard. According to German courts, an adjustment of the contract can be requested if the basis of the contract has changed significantly after the contract has been concluded and the parties would not have concluded the contract or would have concluded it with a different content if they had foreseen this change. Furthermore, it is necessary that the affected party cannot reasonably be expected to adhere to the contract under the changed circumstances.

There is no case law yet specifically on import tariffs. However, in the case of other price increases, the courts have set the threshold very high. Therefore, German courts may not consider the imposition of import tariffs in the range of 25% to constitute a significant interference with the basis of the transaction. If substantially higher tariffs are imposed (e.g. in the range considered by the US for goods from China), there may be a different outcome.

It is generally recognised that a change in economic legislation – which could also include punitive tariffs – could justify an amendment of contract. The threshold established by German courts are also very high: the adjustment of the contract must be necessary due to avoiding an intolerable result that is irreconcilable with justice and equity and thus cannot be reasonably expected of the affected party in good faith.

The parties could define the imposition of import tariffs (with a certain minimum amount, not every amount would qualify) or the sudden change or fluctuation of those tariffs as cases of a force majeure event in the respective contract clause.

"Force majeure events shall also include import tariffs of more than [•]% being imposed in the destination country of the goods after concluding this agreement."