Force Majeure and Hardship under German Law: § 313 BGB and Contract Clauses

No statutory force majeure rule

Many international contracts contain a force majeure clause, and many business people assume that the law provides a general defence of this kind. German law does not. The Civil Code (BGB) contains no general definition or rule on it. The term appears only in specific statutes, such as transport and travel law. Instead, three sets of general rules address unforeseen events: the rules on impossibility of performance, the requirement of fault for damages claims, and the doctrine of disturbance of the basis of the contract (Störung der Geschäftsgrundlage) in § 313 BGB.

A contractual force majeure clause therefore does not merely restate the law; it changes the statutory allocation of risks. That makes it important to understand the statutory baseline before drafting or invoking a clause. German courts interpret contractual clauses in light of the statutory rules and, where clauses are standard terms, review them under §§ 305 to 310 BGB.

This article explains the statutory rules, the requirements of § 313 BGB, the design of contractual clauses, and lessons from recent crises.

Impossibility and fault

Under § 275(1) BGB, the claim to performance is excluded to the extent that performance is impossible for the debtor or for anyone. A debtor may also refuse performance if it requires effort that is grossly disproportionate to the creditor's interest in performance, taking into account the content of the obligation and good faith (§ 275(2) BGB). If the debtor need not perform, the creditor generally loses its obligation to provide counter-performance (§ 326(1) BGB).

Whether the debtor must pay damages is a separate question. Under § 280(1) BGB, the creditor can claim damages for a breach of duty unless the debtor is not responsible for it. The debtor is responsible for intent and negligence unless a stricter or milder liability is agreed, for example by assuming a guarantee or a procurement risk (§ 276(1) BGB).

An event beyond the debtor's control – a natural disaster, a government ban, a strike at a third party – usually means the debtor is not at fault. However, a seller of generic goods who has assumed a procurement risk may be liable even without fault if the goods are still available on the market.

Temporary impediments

Many disruptive events are temporary: a port closure, a factory fire, a cyber attack. German law treats temporary impossibility mainly through the rules on delay. The debtor is not in default if it is not responsible for the delay. If the delay makes the purpose of the contract unachievable or continued waiting unreasonable, it may be treated as permanent impossibility. Contracts should regulate temporary impediments specifically, including suspension periods and termination rights.

Disturbance of the basis of the contract (§ 313 BGB)

Under § 313(1) BGB, if circumstances that became the basis of the contract have changed significantly after conclusion, and the parties would not have concluded the contract or would have concluded it with different content had they foreseen the change, adjustment of the contract can be demanded to the extent that one party cannot reasonably be expected to uphold the unchanged contract, taking into account all circumstances, in particular the contractual or statutory allocation of risks. If adjustment is impossible or unreasonable, the disadvantaged party can withdraw or, for long-term contracts, terminate (§ 313(3) BGB).

The doctrine is a safety valve, not a general escape clause. Courts apply it restrictively. Above all, it does not apply where the contract or the law allocates the risk to one party. A party that agreed a fixed price bears the risk of cost increases; a supplier that assumed a procurement risk bears the risk of supply shortages. Only when a change goes far beyond the risks assumed and leads to an intolerable result can § 313 BGB help. Even then, the primary remedy is adjustment, for example a price increase or a sharing of losses, not termination.

Pandemic and energy crisis

The COVID-19 pandemic tested § 313 BGB in practice. For commercial leases, the legislature introduced a temporary presumption that government closure orders could constitute a significant change of the basis of the contract (Article 240 § 7 EGBGB), which has since been repealed. The Federal Court of Justice confirmed that pandemic-related closures could justify a rent adjustment, but rejected a schematic split of losses and required an assessment of all circumstances of the individual case. During the energy crisis of 2022, many suppliers and customers relied on § 313 BGB for price adjustments, with mixed results depending on the contractual risk allocation.

Designing force majeure clauses

A good force majeure clause defines the triggering events, the required causal link, the notice and mitigation duties, the legal consequences and the termination rights. Definitions commonly combine a general description – an event beyond the party's reasonable control that could not reasonably have been foreseen or avoided – with a non-exhaustive list of examples such as natural disasters, epidemics, war, terrorism, sanctions, government measures, strikes and cyber attacks. Whether events at suppliers or subcontractors count should be addressed expressly.

Legal consequences usually include suspension of the affected obligations for the duration of the event, exclusion of damages, and a right to terminate if the event lasts longer than a defined period. The clause should clarify whether the affected party remains obliged to make payments and how partial performance and allocation of limited supplies (for example pro rata among customers) are handled. Many companies use the ICC model clause as a starting point and adapt it to German law.

Standard terms control

Such clauses in standard terms are reviewed under § 307 BGB. A clause that allows the user to escape its obligations too easily, for example on the basis of any delivery problem at a supplier, may be invalid as an unreasonable disadvantage. Our article on standard terms in B2B contracts explains the test.

Hardship and price adjustment clauses

The clauses discussed above address events that prevent performance. Hardship clauses address events that make performance much more onerous without preventing it, such as sharp cost increases. They typically oblige the parties to renegotiate in good faith if circumstances change fundamentally and provide for a mechanism if negotiations fail, such as adjustment by an expert or a court, or termination.

Because § 313 BGB is restrictive, a contractual hardship clause can give more predictability. The clause should define the threshold for hardship as precisely as possible, for example by reference to a percentage increase in specified costs, and set a timetable for negotiations so that the parties are not left in limbo.

In many cases, a price adjustment clause linked to objective indices – energy prices, raw material indices, wage indices – is more practical than a general hardship clause. Such clauses must be transparent and, in standard terms, balanced: they must allow price reductions as well as increases and must not allow the user to increase its profit margin. Our article on limitation of liability clauses discusses related drafting issues.

Sanctions, export controls and tariffs

Recent years have added new types of disruption: sanctions against Russia and Belarus, export control restrictions on dual-use goods and sudden tariff increases. Sanctions can make performance legally impossible; a party that is prohibited from delivering under EU sanctions law cannot be ordered to perform, and EU sanctions regulations contain no-claims clauses protecting parties that do not perform because of sanctions. Export licence requirements can delay performance, and licence refusals can make it impossible.

Tariffs, by contrast, usually make performance more expensive rather than impossible. Whether the seller or the buyer bears the cost depends on the agreed delivery terms, such as Incoterms, and on price clauses. Only exceptionally will tariff increases justify adjustment under § 313 BGB. Contracts should therefore contain specific sanctions, export control and tariff clauses rather than relying on general force majeure language. Our article on US tariffs and contracts discusses these issues.

Practical steps when an event occurs

When an event affects performance, companies should first analyse the contract: is there a force majeure or hardship clause, what does it cover, what are the notice requirements? They should then assess the statutory position under §§ 275, 280 and 313 BGB. Notice should be given promptly and in the required form, with a description of the event, its expected duration and its effect on performance. Mitigation efforts – alternative suppliers, alternative routes, partial deliveries – should be documented, since they matter for fault and for the reasonableness of claims.

Where the event affects many contracts, a coordinated approach across customers and suppliers is essential. Companies should avoid inconsistent positions, such as invoking an excuse towards customers while insisting on full performance by their own suppliers for the same event. Correspondence should be drafted carefully, as it will become evidence in later disputes.

Insurance cover should also be checked early. Business interruption, contingent business interruption and trade credit policies may respond to certain events, but they often contain exclusions, for example for epidemics or war, and strict notification deadlines. Coordinating the contractual position with insurance claims helps to avoid a situation in which a company waives contractual claims that its insurer would expect it to pursue.

International contracts

Where the UN Convention on Contracts for the International Sale of Goods applies, Article 79 CISG exempts a party from damages if the failure was due to an impediment beyond its control that it could not reasonably have been expected to take into account or overcome. Its relationship with contractual clauses and with German domestic law should be considered when drafting cross-border supply contracts.

How TRW & Co helps with force majeure and hardship

We advise companies on excuse, hardship and price adjustment clauses and on the application of §§ 275, 280 and 313 BGB in crises. We review and draft clauses, assess claims and defences when supply chains are disrupted, prepare notices and negotiate contract adjustments, and represent clients in litigation and arbitration. Our work connects with our commercial contracts, commercial litigation and manufacturing teams. Please contact us. This article is general information and not legal advice.