Full-scale invasion of the Russian Federation into the territory of Ukraine has fundamentally impacted the legal and economic landscapes, notably altering contractual relationships.
In the conditions of ongoing military aggression, domestic businesses of all levels – from small to large – face unprecedented challenges related to fulfilling their obligations, making detailed formulations and provisions regarding force majeure in contracts not just a formal recommendation, but a practical necessity.
From the analysis of the provisions of Article 14 Part 2 of the Law of Ukraine “On Chambers of Commerce and Industry in Ukraine,” it can be seen that for an event to be qualified as force majeure, it must have three cumulative characteristics:
- Extraordinariness: an event whose occurrence is not expected by the parties under normal conditions of economic activity. A conscientious and reasonable participant in contractual legal relations could not have foreseen its occurrence even with a sufficient degree of caution.
- Irreversibility: circumstances, the occurrence or consequences of which could not have been prevented by the party to the legal relations even with due diligence and the application of reasonable preventive measures.
- Impossibility of performance. This is the most important characteristic. A force majeure event must objectively make the performance of a specific obligation impossible in principle, regardless of the efforts or material costs that the party has incurred or could have incurred. It is not just a situation that causes difficulties, economic disadvantage, or temporary inconvenience.
And although the concepts of “war,” “hostilities,” and “armed conflict” were previously often intuitively considered quintessence of force majeure, modern realities require a more nuanced approach to defining and specifying extraordinary and irreversible circumstances that objectively make the performance of obligations impossible as stipulated in the contract.
Initially, the full-scale invasion of the Russian Federation and the declaration of a state of war on the entire territory of Ukraine on February 24, 2022, were undoubtedly considered unforeseeable events, and the parties to the contract had the right to refer to the onset of hostilities as a basis for exemption from liability for complete or partial non-performance of their obligations. However, over time, unscrupulous counterparties increasingly began to abuse their rights, using military actions as a legitimate opportunity not to fulfill their obligations at all, exploiting the imperfect definition of force majeure provided in contracts.
Taking into account the current realities, the mere fact of conducting hostilities on the territory of Ukraine can no longer be considered the sole, sufficient, and unconditional basis for exemption from liability for complete or partial non-performance of contractual obligations, and the party referring to specific events must prove the direct cause-and-effect relationship between force majeure circumstances and the objective impossibility of performing a specific obligation (a similar conclusion was reached by the Supreme Court in its decision of May 9, 2023, in case No. 903/573/22).
Accordingly, to prove the occurrence of a force majeure event, it is not enough to formally refer to the letter of the Chamber of Commerce and Industry of Ukraine dated February 28, 2022, No. 2024/02.0-7.1, as under each case, a certificate from the Chamber of Commerce and Industry of Ukraine is required, specifying which specific obligation under which contract could not be objectively fulfilled due to a specific circumstance.
At the same time, the certificate of the Chamber of Commerce and Industry of Ukraine is not an unequivocal proof of the occurrence of force majeure circumstances for the obligor referring to it as a basis for exemption from liability. Such a conclusion is formulated in the consistent practice of the Supreme Court on this matter. The certificate of the Chamber of Commerce and Industry of Ukraine confirming the presence of force majeure circumstances cannot be considered an indisputable proof of their existence and must be critically evaluated by the court taking into account the circumstances of the case and in conjunction with other evidence (decisions of the Cassation Administrative Court of the Supreme Court dated October 4, 2022, in case No. 927/25/21, dated September 21, 2022, in case No. 911/589/21, dated June 14, 2022, in case No. 922/2394/21, dated August 18, 2022, in case No. 908/2287/17, dated February 14, 2018, in case No. 926/2343/16, dated July 16, 2019, in case No. 917/1053/18, and dated November 25, 2021, in case No. 905/55/21).
Circumstances that may be qualified as force majeure (irresistible force) can be confirmed by proper evidence, including expert opinions and witness testimonies (decision of the Grand Chamber of the Supreme Court dated October 26, 2022, in case No. 905/857/19).
Furthermore, when entering into any contract during ongoing military aggression, the parties must be aware of all possible consequences, risks, and difficulties associated with the state of war (a conclusion of the Supreme Court mentioned in the decision of October 10, 2024, in case No. 910/332/24), as a result of which military actions on the territory of Ukraine can no longer be considered by themselves as force majeure.
Although “war,” “military aggression,” or a “state of war” may and should be listed, it is crucial to go beyond these broad terms and specify which aspects or consequences of these events constitute force majeure for a specific contract.
Considering current trends and the relevant practice of the Supreme Court, the definition of force majeure in contracts in 2025 requires a more detailed and pragmatic approach adapted to the nature of obligations and the operational environment of the parties. Examples may include:
- Direct military actions (e.g., bombings, ground battles, missile strikes) in a specific geographical zone of performance, production, or storage of goods that are the subject of the contract.
- Destruction or damage to critical infrastructure (e.g., roads, bridges, railway lines, power grids, communication networks) that directly and objectively prevents the transportation of goods/performance of the contract in general.
- Official orders, prohibitions, or restrictions issued/imposed by state authorities (e.g., curfew, evacuation orders, export/import bans, blockades, closure of ports or airspace) and/or local self-government bodies that make the performance of obligations objectively impossible.
- Mobilization of key personnel, whose unique skills are indispensable for performance, making the obligation objectively impossible to fulfill.
For contracts concluded in 2025, it is advisable to explicitly state that general conditions of wartime (e.g., the mere existence of a state of war, general economic instability, or typical logistical problems) are not force majeure if they do not lead to specific, new, unforeseen, and irreversible consequences beyond the general risks recognized at the time of contract signing.
Additionally, when entering into contracts, it is important to differentiate between the concepts of “force majeure” (Article 617 of the Civil Code of Ukraine) and “fundamental change of circumstances” (Article 652 of the Civil Code of Ukraine).
Unlike force majeure circumstances (irresistible force) that make the performance of an obligation impossible in principle, a fundamental change of circumstances is an evaluative category that involves the development of a contractual obligation in a way that makes the performance more burdensome, complicated, for one party to the contract, for example, due to an increase in the cost of performance or a decrease in the value of the performance received by the party, significantly altering the balance of contractual relations, leading to the impossibility of performance.
Such a conclusion is provided in the decision of the Grand Chamber of the Supreme Court dated July 2, 2019, in case No. 910/15484/17, and in the decision of the Supreme Court dated July 21, 2021, in case No. 912/3323/20.
In the recommendations of the International Chamber of Commerce on the application of force majeure and hardship clauses in 2020 (ICC Force Majeure and Hardship Clauses 2020), attention is also drawn to the different definitions and legal consequences of force majeure and fundamental change of circumstances. These concepts are distinguished in the UNIDROIT Principles and the Principles of European Contract Law.
According to the content of the conclusion of the Supreme Court provided in the decision of August 31, 2022, in case No. 910/15264/21, force majeure circumstances (irresistible force) that make the performance of an obligation impossible in principle, regardless of the efforts and material costs incurred or could be incurred, and a fundamental change of circumstances are different legal situations.
From the analysis of judicial practice and current legislation, it can be seen that unlike force majeure circumstances (irresistible force), a fundamental change of circumstances:
- is an evaluative category that involves the development of a contractual obligation in a way that makes the performance more burdensome, complicated, for one party to the contract, for example, due to an increase in the cost of performance or a decrease in the value of the performance received by the party, significantly altering the balance of contractual relations, leading to the impossibility of performance;
- does not affect the deadline for the performance of obligations (does not change it) and does not exempt the party from liability for non-performance but allows for the termination of such performance (termination of the contract) or the modification of the terms of such performance or the terms of the contract in general (to achieve a balance of interests of the parties, which was disrupted due to a fundamental change of circumstances);
- should not be a result of the parties’ behavior but must be external to the legal relationship between them.
In simple terms, a fundamental change of circumstances is a situation where a party can objectively perform an obligation, but due to changed circumstances, such performance loses its sense for it, or the final result will not be what it expected initially. In this case, there is a need to change the terms of the obligation (contract) to the significantly changed circumstances.
In the presence of force majeure circumstances, grounds arise for exempting the party from liability for partial or complete non-performance of contractual obligations with the consequences of providing relevant evidence.
This is confirmed by the conclusion of the Supreme Court provided in the decision of October 10, 2024, in case No. 910/332/24.
When entering into contracts in 2025 and determining cases and events that will be qualified by the parties as force majeure, it is important to consider both the existence of hostilities on the territory of Ukraine and the fact that military aggression has been an integral part of our lives for a long time, unfortunately, cannot be an unconditional basis for exemption from liability for complete or partial non-performance of contractual obligations by itself.
Although the recommendations described above on how to include force majeure in contracts in 2025 are not a panacea against unscrupulous counterparties, a clear and pragmatic definition of force majeure circumstances undoubtedly serves as an additional incentive for both parties to properly fulfill the concluded contracts to achieve the business goal.
Author: Ruslan Radchenko
“ESQUIRES” lawyer