by B. Aslı Saraçoğlu Uzunoğlu26 March 2026: Client Alert: Rethinking Force Majeure and Hardship in the Wake of Geopolitical Disruption
Beyond Boilerplate: Rethinking Force Majeure and Hardship in the Wake of Geopolitical Disruption
Recent developments in the Middle East, most notably the escalation of armed conflict and the strategic disruption associated with the closure of the Strait of Hormuz, have once again demonstrated how quickly the assumptions underpinning international contracts can unravel. For actors operating in energy, infrastructure, shipping, and commodities sectors, these developments are not merely abstract geopolitical risks but immediate triggers of non-performance, delay, price volatility, and regulatory exposure. Recent practice indicates a noticeable rise in disputes arising from supply interruptions, sanctions-related impediments, and significantly increased costs of performance.
These developments bring into sharp focus a fundamental question of contractual risk allocation: who ultimately bears the consequences when the contractual equilibrium is fundamentally disturbed?
At the core of this inquiry lies the enduring tension between pacta sunt servanda, the principle that contracts must be performed, and clausula rebus sic stantibus, the recognition that contractual obligations cannot remain absolute in the face of radically changed circumstances. This tension is not merely theoretical; it is reflected in the markedly different ways in which civil law and common law systems respond to disruption.
1. Force Majeure: When Performance Becomes Impossible
Force majeure addresses situations in which contractual performance becomes physically or legally impossible due to events beyond the control of the parties.
From a comparative perspective, the divergence between legal systems is pronounced:
Civil Law Approach (Structured and Codified):
Civil law jurisdictions provide a relatively predictable framework. Under Article 1218 of the French Civil Code, an event must be external, unforeseeable, and irresistible. Where these criteria are met, performance is suspended if the impediment is temporary, or the contract is automatically terminated if performance becomes permanently impossible (résolution de plein droit). Similar concepts exist across civil law systems, grounded in the principle that no party is bound to perform the impossible.
Common Law Approach (Contract-Driven and Restrictive):
In contrast, common law systems, particularly English law, do not recognize force majeure as a standalone doctrine. Relief depends entirely on the wording of the contract. In the absence of an express clause, parties must rely on the doctrine of frustration, which is applied narrowly. As established in Davis Contractors v Fareham UDC, performance must become “radically different,” not merely more onerous or expensive. Courts have consistently resisted attempts to expand this threshold.
The practical implication is clear: under common law, inadequate drafting can leave parties without effective relief, even in the face of significant disruption.
2. Hardship: When the Economic Balance Collapses
Hardship addresses a different category of disruption where performance remains possible but has become excessively burdensome due to unforeseen changes in circumstances.
Civil Law Approach (Flexibility and Adaptation):
Civil law systems explicitly recognize the need to preserve contractual equilibrium. Under Section 313 of the German Civil Code (Wegfall der Geschäftsgrundlage) and Article 1195 of the French Civil Code (imprévision), parties are expected to renegotiate when circumstances fundamentally change. If renegotiation fails, courts may adapt or terminate the contract to restore balance. This reflects a broader commitment to good faith and fairness in long-term contractual relationships.
Common Law Approach (Rigidity and Certainty):
By contrast, common law systems generally reject a doctrine of hardship. The prevailing view remains that parties must “stick to their bargain.” Courts have consistently held that increased costs or economic disadvantages do not justify non-performance. In The Sea Angel [2007], the court reaffirmed the narrow scope of frustration, while in Tsakiroglou & Co Ltd v Noblee Thorl [1962], the closure of the Suez Canal, despite significantly increasing the cost and duration of performance, was held insufficient to discharge the contract. The rerouting obligation remained.
These authorities illustrate a consistent principle: economic hardship, however severe, is typically treated as a commercial risk rather than a legal excuse under common law.
3. Strategic Takeaways for Contracting Parties
Against the backdrop of current geopolitical volatility, reliance on default legal doctrines is increasingly inadequate. A more deliberate and forward-looking contractual strategy is required.
Move Beyond Boilerplate
Standard force majeure clauses often fail to capture the complexity of modern disruptions. To achieve true contractual resilience, drafting must move beyond the abstract and name the actual threats: from the sudden closure of the Strait of Hormuz to the complex web of shifting sanctions and regulatory gatekeeping. We must also rethink what an “impediment” really looks like. In the modern market, a logistical deadlock or a legal barrier can be just as fatal to a contract as physical impossibility, and our definitions need to reflect that reality.
Align Drafting with Governing Law
A single event can lead to two completely different legal realities depending on the jurisdiction. For instance, a clause that provides ironclad protection in a civil law setting might offer zero relief under common law scrutiny if the drafting is even slightly off. This requires a conscious alignment between contractual language and the governing legal framework.
Prioritize Procedural Compliance
In practice, force majeure and hardship defenses frequently fail due to procedural shortcomings rather than substantive weaknesses. Strict compliance with notice provisions, evidentiary requirements, and mitigation obligations is essential to preserve contractual rights.
Use Renegotiation Strategically
Particularly in civil law contexts, the duty of good faith provides a powerful basis for renegotiation. Proactive engagement at an early stage can prevent escalation into formal disputes and preserve long-term commercial relationships.
Conclusion
In an environment where geopolitical disruption is no longer exceptional but increasingly systemic, force majeure and hardship clauses can no longer be treated as standard boilerplate. They are, instead, central instruments of risk allocation and contractual resilience. A well-drafted clause does more than allocate risk, it anticipates disruption, structures party conduct in times of crisis, and ultimately shapes the outcome of any dispute that may arise. For parties operating in volatile sectors and regions, investing in precise and context-specific drafting is essential to maintaining contractual certainty in an increasingly unpredictable world.