1.2.1.1 Freedom to contract -
Before drafting and negotiating Force Majeure provisions, the Contracting Authority needs advice from its legal advisers about how much contractual freedom the Parties have under the PPP Contract's governing law to (i) define the concept of Force Majeure in the PPP Contract and (ii) specify its consequences.
| CIVIL AND COMMON LAW DIFFERENCES In jurisdictions which have an underlying legal concept of Force Majeure (typically civil law jurisdictions), the Parties' ability to derogate from the legal definition of Force Majeure and amend or create their own definition of Force Majeure and its effects may be limited and must be verified on a case-by-case basis. In France, for example, Force Majeure is defined by French jurisprudence as an event beyond the control of the parties, unforeseeable and impossible to overcome. In other jurisdictions (typically common law jurisdictions, but also, for example, the Netherlands16), the Parties will have no restriction on their ability to mutually agree on the scope of Force Majeure and the consequences of an event occurring. |
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16 In France, administrative courts will enforce the doctrine of hardship (imprévision), which allows a party to claim compensation through an increase in the contract price where the circumstances of the contract have changed in a manner which could not have been foreseen by the parties (i.e. by events that are unforeseeable, beyond the control of the parties and have a fundamental impact on the economic balance of the contract). Unlike Force Majeure, however, performance is not impossible. French PPP Contracts may provide that imprévision can be invoked in accordance with case law or may define expressly the financial threshold deemed to trigger the Private Partner's right to claim compensation.