Law and regulation of force majeure in Monaco

1. Is there legislation on force majeure in your law system?

There is no specific legislation governing force majeure.

However, there is a provision on liability in cases of force majeure, and the regime of force majeure has been framed and clarified by case law.

2. If so, what is the text of the force majeure clause in your civil code?

As already stated above, there is no text governing contractual clauses on force majeure. 

However, Article 1003 of the Civil Code provides for an exemption from liability in case of force majeure.

3. Is this mandatory or are parties free to regulate force majeure clauses?

The parties are free to regulate and adjust force majeure clauses contractually subject to Monegasque rules on public order.

There is no obligation for parties to provide for force majeure and should they choose not to do so, Article 1003 of the Civil Code will apply. 

4. If it is regulatory, to what extent are parties free to regulate such clauses (e.g. do parties have to take principles of reasonableness and fairness into account) and if so, in what way?

Parties are free to regulate such clauses provided that they do not infringe Monegasque public policy. Fairness and reasonableness do not have to be taken into account per se. However, in the event of a dispute, the Monegasque Courts would assess whether the clause complies with the general rules applicable to contractual obligations in Monaco, such as good faith or the prohibition of discretionary clauses.

Usually, parties regulate:

  • the definition of force majeure; and
  • the liability resulting from a force majeure event.

5. If a contract just says you can terminate for “force majeure” is there any guidance/case law as to what this means (in the absence of it being defined in the relevant contract)?

Monegasque Courts consider that: “the event constituting force majeure must be unpredictable, external and irresistible or insurmountable” (see for example: Court of appeal - judgment of 29 September 2015).

6. Is there a difference in all of this in B2B transactions versus B2C transactions?

To our knowledge, there is no difference in the regulation of force majeure between B2B and B2C contracts. However, it should be noted that there are no consumer protection laws in Monaco.

7. Is there a difference in judgement when the force majeure clause is laid down in a contract or in T&C’s?

To our knowledge, there is no difference in judgment when the clause is in a contract or in T&Cs.

8. Do you have examples of force majeure clauses which you think (would) work well in practice?

In our practice, we principally deal with two types of force majeure clauses:

  • clauses that define force majeure: the drafting of such clauses may vary depending on the industry concerned; and
  • clauses that determine liability in case of force majeure: such clauses should be carefully drafted since they often derogate from the rules provided in the Civil Code.

9. Do you (already) have an example of a force majeure clause which is “corona future proof” or “virus proof” and you willing to share that with us?

Epidemics, viruses or certain type of viruses may be included in the scope of a contractual force majeure clause. According to our experience, it is safer to provide a precise definition of the employed terms such as “virus” or “epidemic”. Another possibility would be to refer to the definition given by an international organization (such as the World Health Organization).

10. Are there any alternative remedies that a party could consider based on being unable to perform a contract due to the corona virus?

To our knowledge, there are no alternative remedies that a party could consider. However, there might be amicable or contractual solutions to mitigate the consequences of non-performance of a contract, such as suspension of execution/payment until the end of the event, payment extension, or renegotiation of the contract.

11. Is there anything else we should know or you would like to share on this topic?

We are currently assisting clients on force majeure issues such as the interpretation of force majeure clauses in the present context and remain fully available for any queries on this matter.

Portrait of Stephan Pastor
Stephan Pastor
Avocat Associé | Partner
Monaco
Portrait of Daniel Goldenbaum
Daniel Goldenbaum
Advanced Associate
Monaco