Force majeure and hardship in international contracts: two different clauses

In international contracting, two distinct devices respond to a supervening change of circumstances: force majeure, which relieves a party from liability where an impediment beyond its control prevents performance, and hardship — supervening excessive onerousness — which opens the door to renegotiation where performance remains possible but has become disproportionate. Neither is treated alike across legal systems, and neither produces uniform effects if the contract has not provided for it. What follows sets out both concepts, how they are treated under Spanish law and under the instruments commonly used in cross-border trade, and what a clause must contain in order to work.

What force majeure is and what effects it produces

The Spanish Civil Code does not define force majeure, but its article 1105 states the rule from which the concept derives: save in the cases expressly mentioned by law and those in which the obligation so provides, no one is liable for events that could not have been foreseen or that, being foreseen, were unavoidable. To that rule are added the discharging effects of its articles 1182 and 1184: an obligation to deliver a specific thing is extinguished where the thing is lost or destroyed without the debtor's fault and before the debtor is in default, and the debtor is likewise discharged from obligations to do where performance becomes legally or physically impossible. Proof is no minor matter: under its article 1183, where the thing is lost while in the debtor's possession, the loss is presumed to have occurred through the debtor's fault, subject to evidence to the contrary.

In the international sale of goods, the 1980 Vienna Convention — to which Spain acceded by the instrument published in the Official State Gazette of 30 January 1991 — deals with the matter in its article 79: a party is not liable for a failure to perform if it proves that the failure was due to an impediment beyond its control and that it could not reasonably be expected to have taken the impediment into account at the time of conclusion of the contract, or to have avoided or overcome it or its consequences. Three further points in that same provision define its real scope: the exemption has effect for the period during which the impediment exists; the affected party must give notice of the impediment, and is liable for damages resulting from the other party's failure to receive that notice within a reasonable time; and the exemption concerns damages, without preventing the other party from exercising any other right under the Convention. Force majeure, therefore, does not mean automatic termination of the contract.

What hardship is and how it differs from force majeure

Hardship operates on different ground: performance remains possible, but a supervening event has fundamentally altered the equilibrium of the contract. Its reference formulation is found in the UNIDROIT Principles of International Commercial Contracts, 2016 edition. Article 6.2.1 states the starting rule — a party is bound to perform even if performance has become more onerous — and article 6.2.2 defines hardship as the occurrence of events that fundamentally alter that equilibrium, either because the cost of a party's performance has increased or because the value of the performance it receives has diminished, provided four conditions are met: the events occur or become known after the conclusion of the contract, they could not reasonably have been taken into account at the time of contracting, they are beyond the control of the disadvantaged party, and that party did not assume the risk of them.

The effect is different too. Under article 6.2.3, the disadvantaged party may request renegotiation without undue delay, stating the grounds, although that request does not in itself entitle it to withhold performance; if no agreement is reached within a reasonable time, either party may resort to the court, which may terminate the contract or adapt it with a view to restoring its equilibrium. It should be stressed that the UNIDROIT Principles are not automatically applicable law: under their own preamble, they apply where the parties have agreed that their contract be governed by them, and they may be used to interpret or supplement uniform international law or domestic law. Their incorporation is a matter of agreement.

How Spanish law treats supervening excessive onerousness

Spanish law has no general statutory regime for hardship. Its functional equivalent is the case-law doctrine of the rebus sic stantibus clause, of purely judicial creation, applied restrictively and not in a straight line. In 2014 the First Chamber of the Supreme Court applied it in two significant rulings: STS 333/2014 of 30 June (ROJ STS 2823/2014; ECLI:ES:TS:2014:2823), which upheld the modification of an advertising exploitation contract in the face of a dramatic fall in turnover during the economic crisis, and STS 591/2014 of 15 October (ROJ STS 5090/2014; ECLI:ES:TS:2014:5090), which reduced by 29 % the annual rent under the lease of a building operated as a hotel.

That line was subsequently corrected. STS 19/2019 of 15 January (ROJ STS 57/2019; ECLI:ES:TS:2019:57) rejected the rule in another hotel lease because the contract itself had allocated to the tenant the risk of a fall in revenue, and STS 156/2020 of 6 March (ROJ STS 791/2020; ECLI:ES:TS:2020:791) set aside the judgment under appeal for undue application of the rule and summarised the doctrine: the alteration must be of such magnitude as to increase significantly the risk of frustrating the purpose of the contract, and the supervening circumstances must have been wholly unforeseeable, so that a party which assumed the risk — expressly or impliedly — or should have assumed it because it was reasonably foreseeable cannot invoke the rule. Post-pandemic case law confirms that rigour and shifts the weight onto evidence: STS 1891/2025 of 18 December (ROJ STS 5724/2025; ECLI:ES:TS:2025:5724) rejected the doctrine in the lease of hospitality premises because the claimant had not proved the economic loss caused by the health restrictions, and STS 670/2026 of 4 May (ROJ STS 1977/2026; ECLI:ES:TS:2026:1977) ruled to the same effect. Leaving the fate of a cross-border transaction to a court's assessment of rebus sic stantibus is therefore an uncertain bet with a demanding evidentiary burden.

What the ICC model clauses contribute

Faced with that divergence between legal systems, the International Chamber of Commerce published in March 2020 its Force Majeure and Hardship Clauses, which update the 2003 versions and may be incorporated into the contract or used as the basis for a tailor-made clause. The force majeure clause, available in a long form and a short form, defines the event by three requirements — that the impediment is beyond the party's reasonable control, that it could not reasonably have been foreseen at the time of conclusion of the contract, and that its effects could not reasonably have been avoided or overcome — and adds a list of events, including war, embargo, act of authority, epidemic and prolonged breakdown of transport, in respect of which the first two requirements are presumed to be met. The threshold is deliberately lower than impossibility of performance: it is built on reasonableness.

The clause also governs what is usually left out: notice without delay, the affected party's duty to take all reasonable measures to limit the effects of the event, and the right of either party to terminate the contract where the duration of the impediment substantially deprives them of what they were reasonably entitled to expect, with a default threshold of 120 days. The hardship clause requires the parties to negotiate alternative terms and offers three closing options from which they must choose: that the affected party may terminate the contract, that the judge or arbitrator may adapt or terminate it, or that the judge or arbitrator may only declare termination.

What a force majeure or hardship clause must specify

From the above follow the points a clause must settle expressly. First and foremost, which device is being regulated: a force majeure clause drafted in terms of impossibility does not cover mere cost increases, so an extreme rise in costs that does not prevent performance leaves the affected party without cover unless hardship has also been agreed. Then, which events trigger it, with a list adapted to the sector and to the actual logistics route; within what period and in what form notice must be given; what duty to mitigate falls on the affected party, the point on which the later evidentiary dispute usually turns; and what happens if the situation continues: suspension, the time threshold after which the contract may be terminated, and settlement of what has already been performed.

These clauses must be placed alongside the other structural decisions of the transaction — governing law, forum or arbitration and language — and coordinated with the allocation of transport risk set out in the Incoterms 2020. A force majeure clause that contradicts the agreed Incoterm creates precisely the uncertainty it was meant to avoid.

How we help with international contracting at RCM Legal

Two situations recur in cross-border transactions. The first is the contract with no hardship clause, where an unforeseen rise in costs forces a party to perform at a loss with no room to renegotiate, because neither the Vienna Convention nor the rebus sic stantibus doctrine offers a safe way out to a party that did not provide for it. The second is the contract whose force majeure clause was drafted in general terms: when the problem arises, the parties argue over whether the event falls within it, whether notice was given in time and whether reasonable steps were taken to mitigate — an argument settled years later and on the evidence. In both cases, what was missing was a clear allocation of the risk of the unforeseeable.

At RCM Legal we draft and review the force majeure and hardship clauses of international contracts, and coordinate them with the governing law, the forum and the Incoterms of each transaction. As commercial lawyers in Murcia with a cross-border contracting practice, we advise companies that buy, sell or supply services outside Spain. If your business deals with foreign counterparties, tell us about your contracts and we will allocate the risk of the unforeseeable before it materialises.