What a company can do in the case of a breach of contract due to the coronavirus

The effect of the coronavirus on Hungarian trade is already significant. One of the most important issues for businesses is whether the coronavirus can be an adequate basis for failure to perform and what the consequences of the damages are. Dr. Krisztián Alexandra and Dr. Tamási Artúr, associate attorney for the Baker McKenzie Dispute Resolution Group, gathered the most important informations.

The commercial issues related to the coronavirus should be distinguished according to whether the coronavirus renders the contract impossible or “merely” prevents it. In case of impossibility we can talk about the often mentioned force majeure. Force majeure is not defined in Hungarian law, nor is it subject to special legislation. Judicial practice regards force majeure as an absolutely irresistible natural or human force that cannot be prevented by human means and typically leads to the impossibility of contracts.