Problems with the implementation of Polish-Ukrainian trade agreements can be resolved

Due to military operations in Ukraine, deliveries or payments between Polish and Ukrainian entities became impossible. This means that many companies are unable to fulfill their obligations under the signed trade agreements. War, however, is not a factor that automatically terminates or suspends contracts. There are several ways to resolve this situation under international law. 

"In trade agreements, war, an act of terrorism may be treated differently, depending on what legislation is in the contract. Trade agreements between Polish and Ukrainian companies usually remain in force. Under Ukrainian legislation, war, and terrorism may be included in the related part. with force majeure, something that can be unpredictable," Andrii Romanchuk, partner at Eucon Legal Group, assessed.

As we read in the study by EY, several clauses can be applied in this situation, such as hardship, force majeure, or material adverse change (MAC).

Hardship in commercial contracts consists in the stipulation in the contract that when significant difficulties arise in the implementation of the contractual relationship (it is well to define them precisely), which could not be foreseen at the stage of the contract formulation, the parties will be obliged to start negotiations to develop an alternative model of performance mutual obligations. On the other hand, the force majeure clause generally releases both parties from liability or contractual obligations in the event of extraordinary circumstances beyond the control of the parties and which are related to the consequences of such events. Finally, under the principle of freedom of contract, Polish law allows for the use of the structure of the MAC derived directly from Anglo-Saxon law. Here, too, the key to the application of this clause is a detailed description of the circumstances.

(Newseria)