Law and regulation of force majeure in Portugal

There is no legal definition of "force majeure" under Portuguese law. However, as a legal concept, force majeure can be used to assess whether a contractual obligation is impossible to fulfill due to a cause which cannot be imputed to the debtor, such that the obligation is extinguished in accordance with Article 790 of the Civil Code.

Where a contract does not contain a clause on force majeure, the legal consequences of the event in question must be assessed in accordance with the Civil Code’s rules on impossibility, without prejudice to the possible application of the regime of “abnormal change of circumstances” set out below.

If the impossibility is only temporary, the debtor will not be liable for late performance under Article 792(1) of the Civil Code. 

In this respect, it is important to note that, under Article 792(2) of the Civil Code, impossibility only qualifies as “temporary” if, in light of the purpose of the obligation, the creditor still remains interested in the fulfillment of the obligation.

On the other hand, where performance becomes permanently impossible, the obligations under the contract will expire in accordance with Article 790(1) of the Civil Code. In such case, the counterparty will also be released from its obligations and will be entitled to repayment for those of its own obligations that it has already fulfilled, in accordance with Article 795(1) of the Civil Code. 

N/A

The rules mentioned above on impossibility are mandatory; however, this does not prevent parties from regulating force majeure clauses in their contracts. 

As mentioned above, the Civil Code’s rules on impossibility are mandatory, but do not prevent parties from regulating force majeure clauses in their contracts. 

However, when regulating force majeure clauses, parties must abide by the principles of good faith, possibility, lawfulness and determinability in relation to all contractual obligations, including those provided for under force majeure clauses.

The concept of "force majeure" has the idea of inevitability at its core – it constitutes any natural event or human act (or the effects thereof) which, although predictable or even preventable, cannot be avoided.

The idea that “force majeure” is based on the concept of inevitability has been confirmed by Portugal’s Supreme Court of Justice, which has held that "force majeure" is inevitable and linked to human or natural phenomena which are uncontrollable and unpredictable despite the will of the parties.

Therefore, in determining whether an event qualifies as a “force majeure event”, the following criteria must be satisfied: unpredictability, irresistibility, and externality to the will of the parties.

No. 

No. However, Article 15 of Decree Law 446/85, which establishes the legal framework for General Contractual Clauses (T&Cs), applicable to B2C and B2B transactions, states that General Contractual Clauses are null when there is an imbalance in performance which seriously affects the principle of good faith. 

Any such violation of good faith must be assessed on a case-by-case basis.

Moreover, under Decree Law 446/85, in order for a clause to be valid, it must be communicated in full to the accepting party; the burden of proof for this communication rests with the drafting party, and in case of doubt, the clause is interpreted in favour of the accepting party.

In cases where a contractual obligation is, in fact, capable of being fulfilled, a party that is affected by an abnormal and supervening change of circumstances that was unforeseeable at the time of conclusion of the contract (e.g. where performance of a contract becomes excessively onerous) may have the right to terminate the contract or to amend it in accordance with the rules on fairness, provided that the obligations arising from the contract contravene the principle of good faith and that the risks associated with the obligations under the contract were not inherent to the contract itself.

For this purpose, the Coronavirus pandemic may be considered a change of circumstance unforeseeable at the time of conclusion of the contract pursuant to Article 437(1) of the Civil Code.

In this respect, there must be a direct correlation between the change of circumstance which was unforeseeable at the time of the conclusion of the contract (in case, the Coronavirus pandemic) and the damage caused to the affected party; this correlation must be factually demonstrated. 

On the other hand, as mentioned, the situation must not be covered by the risks inherent to the contract, which is a complex point in Portuguese case law. 

Additionally, according to Article 437(2) of the Civil Code, the unaffected party may refuse to terminate the contract where it accepts the amendment of the contract instead.

Finally, a party will not have the right to terminate or amend the contract if it was in default at the time when the circumstances changed, pursuant to Article 438 of the Civil Code. 

All of the above must be assessed on a case-by-case basis.