Social Force Majeure

  • Thomas Wilhelmsson
Part of the Law and Philosophy Library book series (LAPS, volume 16)


Structuring the general principles of a branch of law anew may be expected to have a greater effect the more concisely the new principles can be formulated. The more clearly the new norms can be presented in the form of ordinary “rules” in the meaning Alexy and Dworkin give this term (see above II.1) the easier it is for the legal decision-maker to use the new instruments. In this chapter it will be shown how such a new, relatively precise legal principle can be created on the basis of a fragmented concrete legal material.


Legal Consequence Consumer Credit General Clause Payment Delay Contract Practice 
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  1. 1.
    As stated earlier, the concrete legal material regarding social force majeure reported in Chapter V also has equivalents in the other Nordic countries (with some reservation for Denmark).Google Scholar
  2. 2.
    Caplovitz 1974 p. 53.Google Scholar
  3. 3.
    Caplovitz 1974 p. 58.Google Scholar
  4. 4.
    Quoted in Cranston 1984 p. 205. A number of later investigations in Great Britain have also demonstrated a close connection between payment delay and unemployment, see Adler 1985 p. 16 and also Conaty 1985 p. 94.Google Scholar
  5. 5.
    Holzcheck - Hörmann - Daviter 1982 p. 339.Google Scholar
  6. 6.
    In a study of cases where credit institutes had withdrawn a credit prematurely because of payment delay, the debtor’s unemployment was found to a corresponding extent to be the most important cause of the delay. Among the cases where the social causes of the delay were known to the lender, there was unemployment in 56% of the cases, see Holzscheck - Hörmann - Daviter 1982 p. 284.Google Scholar
  7. 7.
    Hörmann - Holzcheck 1983 p. 465.Google Scholar
  8. 8.
    Reifner 1979 p. 321.Google Scholar
  9. 9.
    This condition is taken from hire-purchase law.Google Scholar
  10. 10.
    See Reifner 1979 p. 321 ff.Google Scholar
  11. 11.
    Reifner 1980 p. 377 ff.Google Scholar
  12. 12.
    Reifner 1980 p. 375.Google Scholar
  13. 13.
    See for more detail Hörmann 1987 p. 84.Google Scholar
  14. 14.
    BGB-Kommentar p. 295, see also Brüggemeier in BGB-Kommentar p. 102.Google Scholar
  15. 15.
    Hörmann 1987 p. 87, 456. As a further legal argument he adduces a decision of the Bundesgerichtshof, where the court referred to “the legal figure ‘jeopardization of economic existence” (p. 87).Google Scholar
  16. 16.
    The terms Geschäftsgrundlage and unzumutbar are translated here in the same ways as in Zweigert - Kötz 1987 p. 213 f.Google Scholar
  17. 17.
    Medicus 1988 p. 503 ff.Google Scholar
  18. 18.
    As just one example might be mentioned an English case where a woman who had concluded a contract to sell her house had subsequently suffered compound social force majeure: her leg had been amputated as a result of an accident, she had become pregnant and her husband went bankrupt and ended up in prison. The question was whether the purchaser of the house could obtain a decision on specific performance for the handing over of what had been sold. Even though specific performance for the sale of land is normally granted, the court refused to do so in this case since the consequence would be unjust against the vendor. The case, Patel v. Ali [1984] 1 All E.R. 978, is mentioned in Collins 1986 p. 198.Google Scholar
  19. 19.
    Reifner 1979 p. 432.Google Scholar
  20. 20.
    The text of the proposal is given in ZERP Mat 3 p. 57. The proposal is motivated, with reference inter alia to Reifner, by Reiner Huhs in Verhandlungen des 53. Deutschen Juristentages p. K 211 ff.Google Scholar
  21. 21.
    See Verhandlungen des 53. Deutschen Juristentages p. K 247, K 251.Google Scholar
  22. 22.
    Loi no. 78–22 du 10 Janvier 1978, sec. 8.Google Scholar
  23. 23.
    Loi no. 85–1097 du 11 Octobre 1985. See here e.g. European Consumer Law Journal 1986 p. 58 f.Google Scholar
  24. 24.
    Hörmann 1987 p. 457.Google Scholar
  25. 23.
    The Consumer Credit Act, 1974, sec. 129(2)a.Google Scholar
  26. 26.
    Thus in Finnish law e.g. Aurejârvi 1988 p. 71, where sec. 11 of the Act on Interest is stated to be a limited exceptional provision, and Taxell 1972 p. 227, who points out that sec. 2 of the Act on Hire-Purchase, as an exception from accepted rules of avoidance, cannot be applied analogously.Google Scholar
  27. 27.
    When treating the question of impossibility as a precondition for exemption from liability, the “grand old man” of Finnish contract law, Lars Erik Taxell, 1972 p. 320, states for example that “Impossibility may depend on circumstances relating to the person of the debtor, e.g. illness and accident. If the contract requires a personal contribution from the debtor, it would not be correct towards him in such situations to insist upon full compensation liability. To a certain extent, but not generally, this can also apply in some cases where the contract does not necessarily have to be fulfilled by the debtor in person. The situations envisaged here usually concern a culpa liability on the part of the debtor… - illness and accident mean absence of culpa and thus give exemption from compensation liability” (translated here; present author’s italics).Google Scholar
  28. 28.
    See e.g. the Swedish report on reform of the rules on interest, SOU 1985:11, which explicitly states that a proposed Swedish rule on adjustment of interest - now enacted - and also sec. 11 of the Finnish Act on Interest apply to “what is normally termed social force majeure” (p. 119, see also p. 181). The term has earlier been used e.g. in Wilhelms-son 1984 p. 81 f. In addition, as mentioned earlier, it has also come into use in the application of the general clauses of consumer law (see above 8.2.iv).Google Scholar
  29. 29.
    Rodhe 1956 p. 355.Google Scholar
  30. 30.
    Taxell 1972 p. 120.Google Scholar
  31. 31.
    See in particular the new investigation of social obstacles to performance, by Bârlund 1990.Google Scholar
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    Reifner 1980 p. 375.Google Scholar
  33. 33.
    See e.g. Ramberg 1986 p. 37.Google Scholar
  34. 34.
    See for further details the large work on the interpretation of contracts by Huser 1983 p. 539 ff.Google Scholar
  35. 35.
    The borderline between interpretation and supplementation is well known to be diffuse, see e.g. Huser 1983 p. 127.Google Scholar
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    See also on the interpretation of the concrete legal material Wilhelmsson - Sevdn 1983 p. 146 and 011 16/1985 p. 212.Google Scholar
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    Taxell 1972 p. 125.Google Scholar
  38. 38.
    Reifner 1979 p. 327.Google Scholar
  39. 39.
    See also Reifner 1979 p. 326 f.Google Scholar
  40. 40.
    OU 16/1985 p. 212 f.Google Scholar
  41. 41.
    See also corresponding statements regarding hire-purchase in Hakulinen - Raninen 1968 p. 80 and regarding insurance in OU 16/1985 p. 212.Google Scholar
  42. 42.
    Thus the Swedish report SOU 1985:11 p. 182.Google Scholar
  43. 43.
    See as regards hire-purchase Eklund - Nordstrôm 1957 p. 111 and also Hakulinen - Raninen 1968 p. 80, who, among the relevant outgoings, also mention the help one feels obliged to give a close relative or friend who has suffered an accident.Google Scholar
  44. 44.
    Divorce and homelessness, and so on, can indeed lead to or be connected with changes in a party’s property circumstances; as has emerged, however, it is, rather, the increased outgoings caused by these occurrences that have been the focus of attention.Google Scholar
  45. 45.
    See e.g. Taxell 1972 p. 120.Google Scholar
  46. 46.
    Thus e.g. sec. 2 and 11 of the Act on Hire-Purchase, and sec. 11 of the Act on Interest.Google Scholar
  47. 47.
    Thus e.g. Ch. 7, sec. 16 of the Consumer Protection Act.Google Scholar
  48. 48.
    Cf., however, the report OU 16/1985 p. 211 f., where such a formulation is interpreted to cover physical obstacles, too.Google Scholar
  49. 49.
    See also the definition of relevant occurrence above, where the focus is upon the possibilities of the event to affect the debtor’s ability to pay.Google Scholar
  50. 50.
    Reg.prop. 109/1981 p. 23.Google Scholar
  51. 51.
    The Nordic principles on relative obstacles to performance cover situations where a party could in theory fulfill a contract but this would involve “disproportionately large efforts or expenses”. It is asserted that a party is not obliged to meet obligations however burdensome, but that a “limit to sacrifice” can be drawn somewhere, see e.g. Taxell 1972 p. 126.Google Scholar
  52. 52.
    The same purpose underlies Reifner’s (1980 p. 378) interpretation of the debtor’s payment obligation, according to which it should cover only the income available. Google Scholar
  53. 53.
    Taxell 1972 p. 120 f.Google Scholar
  54. 54.
    Reifner 1979 p. 321, as mentioned earlier, in his model also starts from the notion that the debtor should bear responsibility if the unfortunate occurrence was foreseeable at the time when the contract was concluded.Google Scholar
  55. 55.
    In this connection, the travaux préparatoires to Ch. 7, sec. 16 of the Consumer Protection Act also, quite correctly, speak about the debtor having been “aware” that an obstacle will arise. See Reg.prop. 88/1985 p. 32.Google Scholar
  56. 56.
    In the same vein for West German law Reifner 1979 p. 321.Google Scholar
  57. 57.
    See also Reifner 1979 p. 326 f.Google Scholar
  58. 58.
    Reifner 1979 p. 328 mentions culpable neglect to resume work.Google Scholar
  59. 59.
    In sec. 11 of the Act on Interest the counter-party is not explicitly mentioned. However, since this provision does not oblige the court to undertake adjustment when the requirements in it are fulfilled, but only states that adjustment “can” take place, it is obvious that the assessment can also allow some consideration of the fairness of the decision in relation to the counter-party. Under sec. 11 of the Act on Hire-Purchase the bailiff may grant a stay of execution for reasons of social force majeure “insofar as the seller’s right to the goods is not jeopardized or is right in other respects unreasonably set aside”. Lastly, Ch. 7, sec. 16 of the Consumer Protection Act contains a rule that more resembles a general clause: the debtor may plead social force majeure “unless, with consideration to the length of the delay and the other circumstances, this would clearly be unreasonable for the creditor”. This rule, too, appears as a limited exception from the main rule stated in the section. That it may be brought in only in special cases is clear from the use here of the exceptional formulation “clearly unreasonable”.Google Scholar
  60. 30.
    Thus - on account of sec. 285 of the BGB - Reifner 1979 p. 319 ff.Google Scholar
  61. 61.
    See e.g. Hellner 1984 p. 246.Google Scholar
  62. 62.
    The right to claim penal interest, and the right to claim other sanctions, arise, for example, in many cases at different times in Finnish law; see Wilhelmsson - Sevdn 1983 p. 97 f.Google Scholar
  63. 63.
    See e.g. Taxell 1972 p. 320 ff.Google Scholar
  64. 64.
    Three strategies for overcoming the apparent conflict between the Sale of Goods Act and the principle of social force majeure, in the latter’s favour, are conceivable: (i) One can maintain that the Act is not intended to be exhaustive and hence that the doctrine of social force majeure can be applied as a supplement to the Act. (ii) One could interpret the liability rule of the Act which, modelled on the United Nations Convention on Contracts for the International Sale of Goods, rules out liability for impediments beyond the control of the party, which he could not reasonably be expected to have taken into account or to have avoided or overcome, so that social force majeure is perceived as a relevant impediment; thus Bärlund 1990. (iii) One could employ the general clause of the Sale of Goods Act on adjustment of unreasonable damages as gateways for the principle of social force majeure into the rules on damages in the law of sale of goods. Taxell 1972 p. 226 writes: “In special situations there is reason to consider whether the right to avoidance should be set aside on the ground that the debtor has not negligently caused the breach of contract. Among other things, one can refer to a case where, although the breach is fundamental, avoidance would mean a disproportionately great financial loss for the debtor. As one should in such situations weigh the parties’ interests against each other, it may be correct to refuse the creditor the right to avoidance with reference partly to the financial effects avoidance would have for the debtor (present author’s italics), and partly to the absence of negligence on his part. Here one must also observe whether the creditor’s interest can be sufficiently met in other ways than through avoidance.” (translated here). As another concrete example, reference can be made to a case from the Swedish Market Court, (S)MD 1979:3, where the Court decided upon the fairness of a contract term of a purchase of real estate according to which the seller should have immediate right of avoidance if there was delay in payment of the price. The Court found the term unfair because, among other things, the buyer should as acceptable excuse for the delay be able to plead illness or comparable circumstance.Google Scholar
  65. 67.
    In a British report from 1983 the National Consumer Council/Welsh Consumer Council stresses: “We reaffirm our view…that the fuel industries should collect their debts through the courts, like other creditors. Disconnection should be used only as a last resort, on the express authority of the courts, following the debtor’s failure to keep to the repayment arrangements imposed upon him by the court” (quoted in ZERP Mat 3 p. 89).Google Scholar
  66. 68.
    Note, however, that many cases from the other Nordic countries can be mentioned where the Consumer Ombudsman has succeeded in pushing through changes in general conditions of contract to entitle the consumer to terminate the contract in cases of social force majeure. The cases are reported together in Bärlund 1990 p. 44 ff.Google Scholar
  67. 69.
    See e.g. Lyngso 1971.Google Scholar
  68. 70.
    Taxell 1972 p. 165 draws up the following general guideline for the assessment: “A party should be granted the right to annul a contract when he has an actual need of legal protection which may be suitably met by dissolving the contractual relationship. Such a need may normally be said to presuppose special circumstances (present author’s italics). The right to annulment must not be completely arbitrary. One condition for annulment is that the contractual obligation can be eliminated in such a way that the counter-party’s interest in it is sufficiently well catered for.” (translated here).Google Scholar
  69. 71.
    This has been the course adopted in the draft bills on consumer sales and purchase of dwellings recently put forward in Finland, see above V.7.2.5.Google Scholar
  70. 72.
    As was seen earlier, Reifner 1979 p. 321 ff. is prepared to allow a consumer such a right of return.Google Scholar
  71. 73.
    This expression is used in the regulation of the right of return in home and mail order sales in Ch. 6, sec. 4 of the Consumer Protection Act.Google Scholar
  72. 74.
    In one such decision reported above (V.8.2.iv) the Consumer Ombudsman maintained that in consumer sales there is a move towards accepting that social force majeure, especially in long-term contracts, entitles the consumer to terminate the contract on payment of reasonable compensation.Google Scholar

Copyright information

© Springer Science+Business Media Dordrecht 1992

Authors and Affiliations

  • Thomas Wilhelmsson
    • 1
  1. 1.Department of Private LawUniversity of HelsinkiFinland

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