Agribusiness under martial law: how to solve problems with foreign trade contracts

As a result of the war, Ukrainian farmers usually face two types of problems regarding foreign exchange contracts.

Ukrainian agribusiness, like the entire country, found itself in a difficult situation due to the invasion of Russia, which requires the use of extraordinary legal options for the settlement of contractual disputes. Margarita Bryanska explains how farmers can solve problems with the implementation of foreign economic contracts (foreign economic contracts). and Bohdan Yaskiv in the article “War does not automatically cancel previously made business commitments“. ul>

  • it is impossible to fulfill the obligation at all (obligation in kind or payment for delivery);
  • it is impossible to fulfill individual terms of the contract (term, delivery method, assortment, quantity, etc.).
  • In the first caseas a rule, it is about the destruction of goods (destruction of crops or storage, theft of agricultural products by the occupiers, etc.) or the loss of control over it by the owner (for example, crops or elevators are located in the occupied territory).

    In this case, force majeure circumstances will apply, but they exempt from responsibility, but not from fulfilling the obligation in general. Therefore, it is worth turning to the counterparty with a proposal to terminate such a contract in general due to the objective impossibility of fulfilling it on time or, if possible, to initiate changes to it in the context of the product itself or its delivery terms.

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    Regarding the second case the situation is somewhat simpler: the product itself is available or will be available in the near future, but the seller does not have the opportunity to fulfill the conditions regarding the deadline or the method of its delivery. Again, force majeure helps, but it is worth initiating negotiations on making changes to the contract on the term and method of fulfilling the obligation.

    For example, it is possible to offer an alternative option for the delivery of the goods by rail or motor vehicle, if its quantity allows, but the imposition of the obligation to pay the cost of transportation and insurance of the goods on the way depends directly on the bargaining power of the parties and previous agreements.

    Based on materials: ZN.ua

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