CYIL vol. 15 (2024)

BÁRA MIKA to the contractual relationship (R9, R10, R19) or unpractical because of the uncertain result and length of the court proceedings (R8, R14, R20). Only one respondent, R11, stated that they would consider filing with the court based on the Czech Hardship Rule. This shows a surprising unattractiveness of the regulation. Generally, the indifferent respondents considered the turbulences occurring in 2020–2023 as confirmation that their contracting model was well suited for their business and felt no need to adjust it. Their contracts are often long-term but are based on such a great degree of flexibility (or lack of any hard, specific commitments) that there is no need for exceptions from the pacta sunt servanda principle. The max-flexibility contracts themselves help circumvent any vis major /hardship situations even if the surrounding circumstances change drastically. Going forward, the indifferent respondents reported only a more thorough focus on practical issues which also enhance resilience against negative external influences, such as strengthening supply-purchase systems (e.g., multi-sources suppliers, more material on stock). The remaining twelve respondents work with different, less flexible, business models and reported experience with breaches of contracts due to vis major and/or hardship situations. Many of them also changed their approach to contracting based on these experiences. The following part will focus on these respondents. 4.3 Respondents’ experience with vis major situations Three respondents encountered situations where their contract performance was (temporary) impossible within the meaning of Section 2913 of Civil Code 2012 (the Czech Vis Major Rule ). Factually, the obstacle to performance was the anti-pandemic restrictions on free movement in the first half of 2020 (the anti-pandemic restrictions ) and the export restrictions imposed as part of the EU sanctions against Russia following the invasion of Ukraine in February 2022 (the export restrictions ). The anti-pandemic restrictions affected respondents who produced specialized machinery that needed to be delivered cross-border and installed at the customer’s place of business by the relevant respondent’s personnel. When any cross-border travel was prohibited in early 2020, the delivery was made temporarily impossible because the use of any other personnel was neither possible due to lack of training and specific know-how nor desirable because of negative consequences such as possible frustration with the quality guarantees. The contract performance was thus postponed with an exemption from any liability for the caused delays. While none of the affected respondents faced any damages claims, the excuse from liability still did not solve the negative impacts of the vis major situation. The ultimate conflicts with the customers did not entail fines or damages but the corresponding delay in payment from the customers due upon delivery. To salvage the situation, the respondents had to renegotiate the agreement to change the payment mechanism and avoid cash-flow issues. This effect was exacerbated by the fact that custom-made goods could not be re-sold and represented significant investment during production. Under the export restrictions, the respondents were legally prohibited from delivering to sanctioned customers. To prevent further costs, all affected contracts were terminated almost immediately, usually by unilateral notice without any negotiations 69 or attempt to salvage the situation. No respondent affected by export restrictions reported any issues with this 69 As one respondent put it “… the customer did not recognize the anti-Russian sanctions (…) but there was nothing to discus, it is what it is .”.

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