Contract performance under novel coronavirus epidemic II

 2020-02-29  1993


To actively promote the unified applicable law of work on cases under novel crown pneumonia outbreak , to improve the level of the epidemic prevention and control of the rule of law, the Shanghai higher people's court issues a series of questions and answers concerning the applicable law and procedural matters to cases influenced by the novel crown pneumonia outbreak. Shanghai Nuo Di Law Firm translate and sort out the key issues as below:

Q8: If the construction project is stopped because of the epidemic, can force majeure be applied as a reason for exemption from liability?

Answer: In accordance with the requirements of epidemic prevention and control work, if the construction project is suspended or delayed, the constructor may put forward the claim of exemption or partial exemption for the reason of force majeure, but it shall timely submit the relevant work form to the supervision and owner and go through relevant confirmation procedures according to the procedures agreed in the contract.

It should be noted that under the construction contract, if it is only because of the outbreak of disease prevention and control that it is required to suspend work or delay the resumption of work, the construction party may claim to be exempted from the liability for breach of contract for overdue completion, unless the overall construction contract is canceled as required by the employer.


Q9: If the party cancels the travel plan based on the epidemic situation and asks to terminate the travel contract, does it need to bear the liability for breach of contract?

Answer: According to the need of epidemic prevention and control, if the travel is really impossible and the party concerned requests to terminate the travel contract on the basis of force majeure, it shall be supported in general.

However, the non-refundable actual expenses, such as visa fees and overseas booking fees, shall be settled through negotiation based on the principle of mutual understanding and joint resistance to the epidemic. If it is difficult for both parties to reach an agreement, the case may be handled in accordance with the principles of good faith and fairness.

Q10: Can the contractor request to change the operation contract of shops, hotels, ships and aircraft, etc. due to the suspension of business or the significant decrease in customer flow caused by epidemic prevention and control measures?


Answer: This kind of contracts are obvious profit-making.When business or customer significantly reduced because of epidemic prevention and control measures, the loss caused to the contractor obviously are bigger than that of common business risks. So it should actively guide the parties to reconcile, the contractor may claim to cut the cost of the contracting period or request changes to the corresponding contents of the contract.

Q11: Should the event organizer bear the liability for breach of contract if an art performance, concert or sports match is canceled due to the epidemic?

Answer: This kind of activity has the obvious gathering nature.If the outbreak of an epidemic constitutes a force majeure event for the performance of such contracts, the ticket buyer may apply to the organizer for refund of the tickets, and neither party shall be liable for the termination of the contract.

Q12: If the public carrier refuses to carry the passenger or the cargo on the basis that the passenger or the cargo came from the key area of the epidemic, whether it violates the compulsory contracting obligation of the public transportation carrier?


Answer: Article 289 of the Contract Law of the People's Republic of China stipulates that a carrier engaged in public transport shall not refuse the normal and reasonable transport request of a passenger or shipper.Its purpose is to avoid the monopoly of the public carrier;During the outbreak prevention and control period, the request of the public transport carrier to refuse to transport passengers or goods that may cause the spread of the epidemic in order to prevent the spread of the epidemic in the public interest does not violate the compulsory contracting obligation.


To be clear, it must be based on the notification requirements of relevant departments for epidemic prevention and control or indeed necessary. Otherwise, the public carrier shall take breach responsibility if deny the reasonable request of passenger or cargo.

Q13: For the contract signed between the parties, the price of facial masks and other medical commodities and living material are significantly increased, how to determine the effectiveness of the contract?


Answer: The price of the relevant materials for the prevention and control of the epidemic disease increased sharply between the parties, which violated the mandatory provisions of the Pricing Law of the People's Republic of China, and the price shall be deemed invalid.While dealing with such cases, a letter should be sent to the relevant administrative departments to investigate and punish in a timely manner.


Q14: After the outbreak, facial masks and other anti-epidemic supplies are in short. Some businesses sale "second-hand", "unknown" facial masks, even ordinary masks posing as surgical masks, false mask protection level and commit other frauds, what legal liability shall be born for the sale of substandard epidemic prevention materials?

Answer:During the process of epidemic prevention, if the businesses commit frauds when selling facial masks, it shall apply the provisions of punitive damages of Article 47 of Tort Liability law of China and Article 55 of Consumer Rights and Interests Protection Law of China, such as maintaining the social market order, protect the legitimate rights and interests of the people.While dealing with such cases, the relevant administrative departments shall be promptly sent letters to recommend investigation and punishment; If a crime is involved, it shall be transferred to a public security organ for handling in a timely manner.


Q15: If the operators of e-commerce platforms take measures to deal with sellers of fake and shoddy facial masks, disinfectants and other anti-epidemic materials, such as store clearance and automatic refund for the full quantity of problematic goods orders, shall they bear any legal liability? 

Answer: During the epidemic prevention and control period, the sales of anti-epidemic materials such as masks and disinfectants had a huge impact on the effective implementation of national anti-epidemic measures and the health and safety of consumers.In special periods, sellers should operate in good faith in accordance with the law, strictly control the source of purchases and the quality of products, and refrain from selling fake and inferior or unknown products or violating public interests and order. If an e-commerce platform operator discovers the above behavior and directly takes measures such as store clearance against illegal sellers, meeting the requirements of protecting social and public interests in a special period, it can be deemed as "taking necessary disposal measures according to law" as stipulated in Article 29 of the E-commerce Law of China. It is generally not supported if the seller sue platform operator to assume relevant liability. However, operators of e-commerce platforms need to prove the necessity and appropriateness of measures to safeguard social and public interests.

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