The Russian Federation’s full-scale invasion of Ukraine has dramatically impacted the legal and economic landscape, including a fundamental change in contractual relations.
In the context of ongoing military aggression, businesses of all sizes face unprecedented challenges in fulfilling their obligations. This makes it a practical necessity to ensure that force majeure clauses in contracts are not just formal recommendations, but rather a practical necessity.
An analysis of the provisions of Part 2 of Article 14 of the Law of Ukraine “On Chambers of Commerce and Industry in Ukraine” shows that in order for an event to qualify as force majeure, it must have three cumulative characteristics:
- Extraordinary event: an event not expected to occur by the parties under normal business conditions. A bona fide and reasonable party to the contractual relationship could not have foreseen its occurrence even with a sufficient degree of care.
- Inevitability: circumstances the occurrence or consequences of which could not have been prevented by a party to a legal relationship even with due diligence and the use of reasonable precautions.
- Impossibility of fulfillment. This is the most important characteristic. A force majeure event must make the fulfillment of a particular obligation objectively impossible in principle, regardless of the efforts or material costs that a party has incurred or could have incurred. It is not just a situation that causes difficulties, economic disadvantage or temporary inconvenience.
Although the concepts of “war”, ‘hostilities’, and “armed conflict” were often intuitively considered as the quintessence of force majeure, modern realities require a more balanced approach to defining and specifying extraordinary and unavoidable circumstances that objectively make it impossible to fulfill the obligations stipulated by the terms of the contract.
The full-scale invasion of Ukraine by the Russian Federation and the declaration of martial law throughout Ukraine on February 24, 2022, were initially considered unforeseen events. The parties to the contract had the right to refer to the outbreak of hostilities as a basis for exempting themselves from liability for failure to fulfill their obligations, whether full or partial. However, over time, unscrupulous counterparties began to increasingly abuse their rights by using hostilities as a legal opportunity to avoid fulfilling their obligations altogether. They took advantage of the contracts’ imperfect definition of force majeure.
In light of current circumstances, hostilities in Ukraine alone are no longer sufficient grounds to be exempt from liability for failing to fulfill contractual obligations. The party invoking force majeure must prove a direct causal link between the events and the inability to fulfill a particular obligation. A similar conclusion was reached by the Supreme Court in its May 9, 2023, decision in case No. 903/573/22.
Therefore, proving a force majeure event requires more than a reference to the Ukrainian Chamber of Commerce and Industry’s February 28, 2022, letter No. 2024/02.0-7.1. Each case requires a certificate from the Ukrainian Chamber of Commerce and Industry indicating which obligation under which agreement could not be fulfilled due to a particular circumstance.
At the same time, the certificate of the Ukrainian Chamber of Commerce and Industry is not unconditional proof of force majeure for the party to the obligation that relies on it as a basis for exemption from liability. This conclusion is formulated in the established practice of the Supreme Court on this issue. A certificate of the Ukrainian Chamber of Commerce and Industry confirming the existence of force majeure cannot be considered conclusive evidence of its existence, but must be critically assessed by the court, taking into account the established circumstances of the case and in conjunction with other evidence (resolutions of the CCC of the Supreme Court of 4 October 2022 in case No. 927/25/21, of September 21, 2022 in case No. 911/589/21, of June 14, 2022 in case No. 922/2394/21, of August 18, 2022 in case No. 908/2287/17, of February 14, 2018 in case No. 926/2343/16, of July 16, 2019 in case No. 917/1053/18 and of November 25, 2021 in case No. 905/55/21).
Circumstances that may be qualified as force majeure may be confirmed by appropriate evidence, including expert opinions and witness testimony (Resolution of the Grand Chamber of the Supreme Court of October 26, 2022 in case No. 905/857/19).
In addition, when entering into any contract during the period of ongoing military aggression, the counterparties should be aware of all possible consequences, risks and difficulties associated with martial law (the conclusion of the Supreme Court stated in the decision of 10 October 2024 in case No. 910/332/24), as a result of which hostilities on the territory of Ukraine can no longer be considered as a circumstance falling within the definition of force majeure.
Although “war”, “military aggression” or “martial law” can and should be listed, it is crucial to go beyond these broad terms and specify which aspects or consequences of these events constitute force majeure for a particular contract.
In light of current trends and Supreme Court practice, force majeure clauses in contracts require a more detailed, pragmatic approach, adapted to the nature of the parties’ obligations and operating environment. Examples include:
- Direct military action (e.g., bombing, ground combat, or missile attacks) in a geographic area where goods are produced or stored, or where the contract is performed.
- Destruction or damage to critical infrastructure (e.g., roads, bridges, rail lines, energy networks, and communication networks) that directly and objectively prevents the transportation of goods or execution of the contract.
- Official orders, prohibitions, or restrictions (e.g., curfews, evacuation orders, export/import bans, blockades, or closure of ports or airspace) issued or imposed by government or local authorities that make it impossible to fulfill obligations.
- Mobilization of key personnel whose unique skills are indispensable for performance makes the obligation impossible to fulfill.
For contracts concluded in 2025, it is advisable to explicitly state that general wartime conditions (e.g., the mere existence of martial law, general economic instability, or typical logistical problems) do not constitute force majeure unless they lead to specific, new, unforeseen, and unavoidable consequences that go beyond the general risks recognized at the time of signing the contract.
In addition, when entering into contracts, it is also important to distinguish between the concepts of “force majeure” (Article 617 of the Civil Code of Ukraine) and “material change of circumstances” (Article 652 of the Civil Code of Ukraine).
Unlike force majeure (circumstances of insuperable force), which make it impossible to fulfill an obligation in principle, a material change in circumstances is an evaluative category that consists in the development of a contractual obligation so that the fulfillment of the obligation for one of the parties to the contract becomes more burdensome, complicated, for example, due to an increase in the value of the performance to be performed or a decrease in the value of the performance received by the party, which significantly changes the balance of the contractual relationship, resulting in the impossibility of fulfilling the obligation.
A similar conclusion is given in the decision of the Grand Chamber of the Supreme Court of July 2, 2019 in case No. 910/15484/17 and in the decision of the Supreme Court of July 21, 2021 in case No. 912/3323/20.
The ICC Force Majeure and Hardship Clauses 2020 also draws attention to the different definitions and legal consequences of force majeure and material change of circumstances. The UNIDROIT Principles and the Principles of European Contract Law also distinguish between these concepts.
According to the Supreme Court’s ruling on August 31, 2022, in case No. 910/15264/21, force majeure circumstances that make it impossible to fulfill an obligation, regardless of the efforts or material costs incurred, and a significant change in circumstances are different legal situations.
An analysis of court practice and current legislation shows that, unlike force majeure, a significant change in circumstances
- It is an evaluative category consisting of the development of a contractual obligation in such a way that fulfilling the obligation becomes more burdensome or complicated for one of the parties to the contract. For example, this could be due to an increase in the value of the performance to be provided or a decrease in the value of the performance received by the party. This significantly changes the balance of the contractual relationship and leads to an inability to fulfill the obligation.
- It does not affect the timeframe for fulfilling obligations, nor does it relieve the party from liability for non-performance. However, it allows for termination of performance (termination of the contract) or modification of the terms of performance or the contract in general (to restore the balance of interests between the parties, which was disrupted due to a significant change in circumstances).
- It should not be a consequence of the parties’ behavior, but rather external to the legal relationship between them.
In simple terms, a material change in circumstances occurs when a party can objectively fulfill an obligation, but, due to a change in circumstances, such fulfillment loses its meaning or the end result differs from what was originally expected. In this case, the terms of the obligation (contract) must be changed to reflect the materially changed circumstances.
In the event of force majeure, a party may be released from liability for partial or complete failure to fulfill contractual obligations if relevant evidence is provided.
This was confirmed by the Supreme Court’s October 10, 2024, decision in case No. 910/332/24.
When drafting contracts in 2025, it is crucial to consider the ongoing hostilities in Ukraine and the long-term presence of military aggression, as these factors cannot be the sole basis for exemption from liability for failure to fulfill contractual obligations.
While the above recommendations on how to specify force majeure in 2025 contracts are not a panacea for unscrupulous counterparties, a clear and pragmatic definition of force majeure undoubtedly incentivizes both parties to fulfill their contracts properly to achieve their business goals.