Force Majeure | When does it absolve you of responsibility?

Force Majeure | When does it absolve you of responsibility?

The regulations in the Kingdom of Saudi Arabia aim to preserve rights and oblige contractors to implement their obligations agreed upon in the contract on the specified dates, taking into account the circumstances and events that prevent the implementation of the contract.

The theory of force majeure is one of the most important legal theories addressed by the Saudi regime and stipulated in Islamic law as one of the most important exceptional events that significantly affect the implementation of contractual obligations between parties.

Certain conditions must be met to apply the theory of force majeure in accordance with certain procedures specified by some competent systems, such as the labor system and the civil transactions system.

Force Majeure | When does it absolve you of responsibility?

What is a force majeure clause?

Force majeure is defined in the Saudi system as any event that a person cannot anticipate or respond to, which affects the obligations of the parties to the contract and makes it impossible to implement the obligation due to a reason beyond the parties’ control.

What are the conditions for applying the theory of force majeure?

When applying the force majeure theory, the following conditions must be met:

• Inability to anticipate the event: The event must be one of the events that cannot be anticipated when concluding the contract.
• Impossibility of implementing obligations: This event makes implementing the obligation impossible and not difficult.
• Uncontrollable or impulsive: The event is beyond the control of the parties to the contract and not due to the negligence of one of the parties in taking the necessary preventive measures.

Is force majeure an emergency?

Is force majeure an emergency?

Force majeure differs from emergency circumstances in that force majeure results in the impossibility of implementing an obligation due to an unpredictable event such as earthquakes in areas where they do not often occur or sudden border closures.

Force majeure may result in termination of the contract due to impossibility of implementation.

Emergency circumstances are circumstances that make implementing an obligation difficult and expensive, causing a significant loss for one party.

Examples of emergency circumstances include the Corona pandemic, which caused the loss of many companies and difficulty in implementing contracts due to the precautions and restrictions imposed by the state.

The fundamental difference between force majeure and emergency circumstances is that the obligation can be implemented in the event of emergency circumstances, but with great difficulty, and this may result in resorting to the court and requesting that the obligations be amended and mitigated by the injured party.

The following conditions are required for emergency conditions to be met:

• That the emergency circumstance occurs after the conclusion of the contract between the parties.
• To be unexpected and exceptional.
• Difficulty implementing the commitment.
• To be beyond the control of the parties.

Force Majeure | When does it absolve you of responsibility?

What is force majeure in the civil transactions system?

The Civil Transactions Law stipulates that a person is not responsible for damage if he proves that this damage results from a cause beyond his control, such as force majeure.

What is force majeure in the labor system?

The theory of force majeure is applied in Saudi labor law in the following gradation:

• Reducing working hours: If the state takes precautionary measures or procedures in the event of force majeure that require reducing working hours, pursuant to the recommendation of a competent international organization, an agreement shall be reached between the employer and the worker – within six months of the commencement of the procedures – to take one of the following measures:
  • Reducing the worker’s wage in proportion to actual working hours.
  • Granting the worker leave calculated from his annual leave days.
  • Granting the worker exceptional leave without pay.
• Termination of the employment contract: The employment contract concluded between the worker and the employer shall be terminated in accordance with the theory of force majeure contained in Article 74 of the Labor Law if the following conditions are met:
  • If the period of six months following the commencement of actions taken by the State regarding a state of force majeure has elapsed.
  • If all measures related to reducing the worker’s wage and annual and exceptional leave are applied.

What are the implications of contractual obligations when force majeure occurs?

What are the implications of contractual obligations when force majeure occurs?

Force majeure affects contractual obligations and results in:

• Exemption from liability: The injured party is exempted from liability when the obligation is not implemented and does not demand compensation from the other party for any damage resulting from the contract due to force majeure.
• Suspension of the contract: In some cases, it may be agreed to suspend the contract for a certain period until the end of force majeure, and the contract will resume after the event has passed.
• Termination of the contract: Emergency circumstances may force the parties to terminate the contract due to the impossibility of implementation without resulting in liability on the part of one of the parties.
• Exemption from fines and penalties: Force majeure exempts the injured party from paying the value of the fines and penalties stipulated in the contract.
• Amending the terms of the contract: The parties to the contract can agree to amend the terms of the contract in proportion to the circumstances of force majeure for a certain period of time (as mentioned in the Labor Law).

Force Majeure | When does it absolve you of responsibility?

It is important to seek the assistance of a specialized lawyer from the office of Lawyer Abdul Majeed Al Rashid to obtain specialized legal advice on the terms of the contract and obligations before it is signed by the parties to ensure rights and clear implementation of obligations.

Lawyer Abdul Majeed Al Rashid’s office provides legal services that include studying and analyzing cases, drafting legal memoranda and defenses, representing clients before the competent authorities, attending court hearings, pleading on behalf of clients, and other services.