Cambodia: force majeure

Article 389 of the Civil Code of Cambodia stipulates that non-performance of an obligation refers to the case where the debtor fails to perform the obligation arising from the contract. Article 390 of the same law states that in the event of non-performance of obligation by the debtor, the creditor may demand the enforcement, damage or termination of the contract. Can force majeure release the debtor from the performance of the obligations of the contract or the liability for non-performance of the obligations. This article briefly discusses “force majeure” to provide ideas for research on this topic.

1. Clause on force majeure as agreed by the parties in the contract

Article 311 of the Civil Code stipulates that a contract is the act in which two or more persons are willing to agree to create, modify or cancel an obligation. This provision of the Civil Code is adopted in accordance with the principle of freedom of contract. Therefore, the parties to the contract can include clauses on force majeure in their contract. That is, the parties to the contract who wish to protect themselves from liability for non-performance of the contract due to reason of force majeure may determine in their contract the events to be considered as force majeure and the agreed means of relief or settlement in the occurrence of such force majeure.

In the practice, most of the parties to the contract agree that force majeure refers to any of the following events, such as earthquakes, floods, hurricanes, volcanic eruptions, outbreaks of disease, strikes, wars, social unrest, or state’s action, and other events which occur against the will of the party, unpredictable and invincible. In addition, the parties may also determine other events as force majeure as they deem fit or necessary. In the example above, the parties can determine force majeure as natural event for which no individual person is responsible or an event other than the natural disaster.

2. Force majeure as determined by law

If the parties do not specify or include the clause on force majeure in the contract, it is more likely that some events that prevent the performance of obligations are not considered as force majeure because such events are not clearly defined in the contract. If the parties to the contract do not define “force majeure” in their contract in advance, what are the events considered the force majeure?

According to the glossary of the Civil Code, force majeure refers to event that occurs against the will of the party, unpredictable and unpredictable and invincible. Accordingly, force majeure can be a naturally occurring event or an unnatural event as long as that event meets the following conditions:

  • The event took place against the will of the party. The party to the incident is not directly or indirectly involved in the cause of the incident;
  • That event is unpredictable. If an event can be predicted, that event is not force majeure;
  • That event is too great to overcome and uncontrollable. If an event can be managed, it is not force majeure.

What does the law say if the parties do not determine the means of relief or remedy for the parties affected by the force majeure in the contract? To answer this question, one has to look at the legal provisions for each case.

For example, Article 398, paragraph 1 of the Civil Code provides that if the debtor fails to perform the obligation, the creditor may claim compensation for damages incurred due to non-performance of the obligation. However, if the debtor proves that he or she has no fault for non-performance of the obligation, the debtor is exempted from liability for compensation.

Further, Article 399, paragraph 1 of the Civil Code provides that if the subject of the obligation is the payment of money, the obligor is not exempted from payment of interest for any delay even if the obligor proves that the delay in payment is the result of force majeure. The interest for the delay is calculated based on the legal rate of interest. If interest rate agreed by the parties is higher than the legal interest rate, the agreed interest rate must prevail.

In conclusion, even if definition and solution of force majeure are decided by laws, it would be a great idea that the parties decide these matters in their contract.

This article is not legal advice or opinion.

Categories Contract Laws

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