Anali - 2023 3c 04

UDC 347.441.144.3:69(497.
11)
CERIF: S 130
DOI: 10.51204/Anali_PFBU_23303A
Sara STOJKOVIĆ, LL.M. (Cantab.)*
FIDIC FORCE MAJEURE CLAUSE FROM THE VIEWPOINT OF

SERBIAN LAW
The purpose of this paper is to present force majeure as stipulated in FIDIC

forms, which are nowadays frequently in use when negotiating the conclusion
of construction contracts concerning major projects. An important remark is
that these forms have been greatly influenced by common law systems where
operation of force majeure is dependent on the contractual definition and
wording of the clause. On the other hand, the Serbian Law on Obligations
contains its own understanding of force majeure-related concept, which might
be amended in accordance with the principle of party autonomy. The paper
further aims to elaborate on this interplay between these FIDIC forms and
Serbian law. The conclusion is that the FIDIC force majeure clause represents
an important contribution to the domestic regime, which does not expressly
address scenarios with temporary impediments, which is necessary for
successful completion of construction works.
Key words: FIDIC General Conditions. – Force majeure. – Impossibility

to perform. – Serbian Law on Obligations. – Temporary
impossibility.
*
Attorney at law, Nikčević Kapor Law Office, Serbia, [email protected].
477
S. Stojković (стр. 477–508)
1. INTRODUCTION: A CONCEPTUAL ALIGNMENT
The maxim states that a contract is concluded when the parties have
reached an agreement regarding the main elements of their transaction.
Under the Serbian Law on Obligations – LOO,1 in terms of a construction
contract, it is sufficient for the parties to agree on the subject and on
the price of construction works in order for construction contract to be
concluded (Biro 1980, 104).2 Nevertheless, every real-life situation entails a
variety of risks that can affect performance of a previously validly concluded
construction contract, and the parties are always advised to anticipate as
many of those as they can, and to include them in the contracts. Construction
projects seem particularly sensitive and uncertain when it comes to these
risks, as they are usually directly exposed to forces of nature, such as
earthquakes, floods, storms, etc. (which is understood as something that
is beyond the parties’ control even in a colloquial discussion), while their
duration does not contribute to the mitigation of such risks (Nikčević 2021,
519). Also, large infrastructure projects are inextricably intertwined with
the public law requirements of the place of construction (e.g. construction
permits, safety measures, etc.), which makes them particularly susceptible
of the risk of change in pertinent legislation. A reasonable question that
arises here is – if the occurrence of an event that hinders performance of
the contract cannot be attributed to either of the parties, which party should
bear the consequences?3
In that sense, when negotiating a construction contract, especially a
complex one, in practice party autonomy reigns supreme. Namely, the parties
usually go beyond the point where they reach an agreement regarding main
elements of their cooperation and go into more detail. There is a plethora
of other terms typically considered by contractors and employers that are
crucial for the successful, i.e. economical and timely completion of the project.
For example, in practice the parties almost without an exemption include
a version of a contractual penalty clause, providing that the contractor is
required to pay a specific sum in the event that it exceeds the deadline.
1
Zakon o obligacionim odnosima [Law on Obligations], Official Gazette of the SFRY
No. 29/78, 39/85, 45/89 – Decision of the Constitutional Court and 57/89, Official
Gazette of the FRY No. 31/93, Official Gazette of SCG, No. 1/2003 – Constitutional
Chart, and Official Gazette of the RS No. 18/2020). See Art. 630 para. 1.
2
Additionally, Art. 630 para. 2 LOO provides that construction contracts must be
concluded in writing.
3
This paper does not discuss the institute of hardship, i.e. change of circumstances,
despite its kinship to the concept of force majeure. Usually, hardship deals with the
possibility to adapt the contract, which requires further discussion.
478 Анали ПФБ 3/2023

Fidic Force Majeure Clause from the Viewpoint of Serbian Law
Of course, the fact that the parties did not agree on some terms does
not mean that they are left without legal protection regarding a particular
issue and that there are no rules outside parties’ contract that might apply.
It is always possible to rely on the default rules of the otherwise applicable
law, i.e. if they contain any rules relevant to the situation at hand. When
dealing with an international contract, however, things become even more
complicated. Different legal systems contain not only different rules, but
different conceptual understandings of legal phenomena in some cases, which
may lead parties that were initially interested in conducting a construction
project to get cold feet just because of different legal backgrounds and
understandings of certain contractual concepts. Simply put, an English
employer and a French contractor are bound to disagree on some terms of
their transaction, because they might not be comfortable with the terms that
the other party suggested, as they might be unknown in their legal systems,
making it difficult for their canny local lawyers to properly advise them.
Equipping parties with adequate remedies in case of impediments that
are outside parties’ control might be particularly challenging when drafting
a contract. These impediments represent the cornerstone of the legal notion
of force majeure, but they are not treated equally in all legal systems (Jaeger
2010, 100). For instance, in French law, which introduced this doctrine
(hence, the French term), force majeure encompasses the full package
consisting of the cause, its impact on the party’s performance, and the legal
consequence pertinent to that impact. Specifically, if an event that is beyond
the parties’ control made it impossible for a party to perform its obligation,
the French position would be that the contract is terminated by operation of
law or suspended if the impossibility is temporary (Malaurie, Aynès 2018,
546–550). Contrastingly, if the performance of the obligation is still possible,
according to position contained earlier in French law, the debtor would not be
provided with an escape route (Karanikić Mirić 2020a, 309). This scepticism
of the French ‘all or nothing’ position, as some authors call it (Živković 2012,
242), has recently been changed with the 2016 reform of Code Civile. Now
it is possible to adapt even a private law contract in the event of changed
conditions, due to unforeseeable circumstances (Malaurie, Aynès 2018,
409–411). On the other hand, in common law systems, the consequences of
unexpected impediments are still largely dependent on specific contractual
provisions and ‘force majeure clauses’ despite the doctrine of contract
frustration having existed for nearly two centuries (Beatson, Burrows,
Cartwright 2010, 474). Courts therein traditionally apply the rules outside
the parties’ contract restrictively due to a deeply rooted belief of the sanctity
of contracts in common law systems (Circo 2020, 63–65). Nevertheless, this
doctrine is conceptually different from the French understanding of force
majeure as it releases the party of its obligation, regardless of whether its
479
performance became impossible or more onerous (Murdoch, Hughes 2008,

344–345). The necessary condition, however, is that the purpose of the
contract has become frustrated.
One of the ways to bridge these differences is via instruments of uniform
law that were tailored to facilitate international contracting by professionals
from different legal cultures and who get together to discuss various
methods for serving the interest of all parties. These instruments usually
contain a version of the force majeure concept, but they strive to offer a
unique mechanism that is not connected to the understanding from any
specific legal system. For example, Article 79 of the 1980 United Nations
Convention on Contracts for the International Sale of Goods (CISG) deals
with the release from liability and adopts a compromised solution which
is ‘somewhere between’ different legal concepts with the similar effect
(Milutinović 2005, 443; Brand 2004, 393). This Article even avoids using the
term force majeure precisely in order to eliminate any possible confusion
or bias towards national doctrines (Milutinović 2005, 444–445; Sekolec
2004, 2–3). Even the instruments that use this term are often followed by
disclaimers explaining that force majeure does not have the same meaning
as the French doctrine. For instance, Article 7.1.7 Principles of International
Commercial Contracts (PICC)4 is named “force majeure”, but its leading
commentary explains that force majeure is accepted as a general principle of
contract law and that Article 7.1.7 is to be interpreted autonomously, while
the drafters kept the French term because of the widespread use of force
majeure clauses and practitioners’ familiarity with these clauses (Pichonnaz
2015, 866–867).5
The previous discussion shows that there can hardly be a single uniform
understanding of force majeure concept across different jurisdictions, while
the term itself is capable of stirring up discussion even in a room fool of
well-versed international lawyers as it can have different meanings.
This paper will analyse and strive to determine the meaning of the force
majeure clause contained in another uniform law instrument designed
particularly for construction projects – the FIDIC Conditions of Contract for
4
This is a soft law instrument developed by the International Institute for the
Unification of Private Law (Institut international pour l’unification du droit privé –
UNIDROIT).
5
In 2003 International Chamber of Commerce (ICC) published its pre-draft force
majeure clause for those parties interested in broadening force majeure excuses
in their contracts, Pichonnaz 2015, 868–869. The clause is available at: https://
iccwbo.org/news-publications/icc-rules-guidelines/icc-force-majeure-clause-2003icc-
hardship-clause-2003/ (last visited 19 August 2023).

Construction,6 specifically, the paper presents and assesses the 1999 Red
Book7 version of the Force Majeure clause8 through the lens of domestic law.
Even though these forms are largely influenced by common law, their Force
Majeure clause strives to reconcile both civil and common law understanding
of the concept and keeps the well-known term (Bunni 2005, 535; Klee 2015,
38–39). Interestingly, the newer edition of these forms from 2017, as well
as some forms that were developed after 1999,9 abandoned the term ‘force
majeure’ to avoid confusion or conflict with similar provisions of governing
law and switched their wording to ‘exceptional risks’ or ‘exceptional events’
(Klee 2015, 38–39).
In any case, these standard forms are frequently used for local projects,
especially for state-organised ones where transnational financial institutions
appear in the role of lenders (Klee 2015, 90–92), and a detailed assessment
of the Force Majeure clause might be beneficial. Apart from that, the recent
COVID-19 pandemic and start of the Russo-Ukrainian conflict, which
are nowadays often used in commercial practice as reasons for delayed
fulfilment of contractual obligations or even impossibility to perform, which
only enhances the need to verify the clause’s compatibility with Serbian law.
However, notwithstanding the FIDIC forms’ widespread use in practice,
Serbian legal literature is still rather scarce and counts only a few published
papers and defended thesis on FIDIC-related problems in general. Despite
6
These forms were developed under the auspices of International Federation of
Consulting Engineers (Fédération Internationale des Ingénieurs-Conseils – FIDIC).
They represent a number of different contract forms containing bespoke terms,
with special attention to large-scale construction projects. As of 1999, the FIDIC
forms differ in the risk allocation and scope of the parties’ obligations (Baker et al.
2009, 19). At the time, the FIDIC published the so-called ‘Rainbow Suite’ consisting
of different forms, i.e. books, each called a different colour. Since then, the FIDIC
published new edition of these books in 2017, to reflect even more fair division of
responsibility (Chern 2020, 175–176). This paper focuses on 1999 version of the
Red Book for the sake of convenience, as this is the most frequently used form (Klee
2015, 271). Nevertheless, the FIDIC Conditions of Contract for Plant and Design-
Build, i.e. the Yellow Book, and Conditions of Contract for EPC/Turnkey Projects. i.e.
the Silver Book, which are almost as popular as the Red Book, contain identical force
majeure clauses.
7
The Red Book is also known as ‘Conditions of Contract for Construction’.
8
Hereinafter the paper will use capital letters when referring to the FIDIC forms
clause to avoid any possible confusion.
9
The term was changed already in the 2008 FIDIC Conditions of Contract for
Design, Build and Operate Projects, i.e. the Gold Book, where the clause is called
Exceptional Risks, while the FIDIC’s 2017 editions uses the term Exceptional Events.
481
that, a doctrinal assessment is necessary for proper understanding of the

forms and their compatibility with the domestic law, which is why this paper
will address this topic.
2. FIDIC’S ‘BETTER SAFE THAN SORRY’ APPROACH
As noted by legal scholars, the FIDIC Red Book is heavily influenced

by common law (Bunni 2005, 54), and as such, it contains a detailed
force majeure clause. Clause 19 in the 1999 Conditions of Contract for
Construction – Force Majeure strives to offer an all-encompassing and fair
risk allocation, while providing the definition and, more importantly, the
consequences in case a severe obstacle amounting to force majeure affects
the contract. Generally, in the absence of an explicit force majeure clause, the
parties to a contract governed by Serbian law rely on a provision from the
LOO’s general part, which merely states that force majeure-like impediments
release the debtor from liability, which is not specific to construction work.10
This does not always seem appropriate especially when dealing with long-
term construction projects which might easily go downstream for reasons
outside the parties’ control and which require careful anticipation of the
consequences of such an impediment. For this reason, the FIDIC forms’
bespoke and rather detailed Force Majeure clause seems not only desirable,
but necessary when Serbian law is applicable.11 This part will deal with
the FIDIC forms’ Force Majeure and underlining mechanisms of the FIDIC’s
‘better safe than sorry’ approach to force majeure impediments from various
aspects.
2.1. Defining Force Majeure Under FIDIC
As a creature of contract, the FIDIC’s force majeure clause is mostly

dependent on its wording. All well-drafted force majeure clauses attempt to
provide parties with all aspects concerning the notion – from definition of
force majeure to its consequences. In other words, the operation of the force
majeure clause depends on the definition of this phenomenon (Baker et al.
10
Section 3 of this paper (especially heading 3.2) analyses this interplay more
closely.
11
The same goes for laws of other former Yugoslav republics where contract law
is also based on LOO, and which deal with force majeure in the same manner.

2009, 498). The FIDIC forms’ clause offers such a definition, and the manner
in which it is drafted suggests that it strives to bring these standardised
contracts closer to the civil law systems.
Specifically, Sub-Clause 19.1 para 1 describes the specific qualities that an
event or a circumstance must have in order to fall within the FIDIC notion of
force majeure. It states that ‘Force Majeure’ means an exceptional event or
circumstance: (a) which is beyond a party’s control, (b) which such a party
could not reasonably have provided against before entering into the contract,
(c) which, having arisen, such a party could not reasonably have avoided or
overcome, and (d) which is not substantially attributable to the other party.12
This broad definition of force majeure largely resembles the understanding
of force majeure within major civil law systems, which usually describe in
general terms what qualities circumstances must have in order to excuse the
party (Conrad 2023, 239–240; Hök, Stieglmeier 2023, 281; Moss, Schneider,
Fiechter 2023, 561). As noted, the focus of the FIDIC forms is on what happens
rather than on the type of event (Chern 2020, 143). Civil law jurisdictions
are nowadays familiar with all the qualities laid down by the FIDIC, or at
12
The FIDIC forms are all about risk allocation. The FIDIC’s Force Majeure clause
might be seen as such a provision dealing with risk allocation, but as Bunni (2005,
535) notes its purpose goes beyond. There are other provisions in the FIDIC’s 1999
Red Book dealing with circumstances that are indeed external to the parties’ control
and which determine the consequences of those circumstances even when they
are not that exceptional. The general risk allocation clause is Clause 17 – Risk and
Responsibility, where the division of risks between the parties is laid out in some
detail, as noted in Robinson (2011, 85). Other clauses are also worth mentioning as
they deal with impediments outside the parties’ control. For instance, Sub-Clause
13.7 provides the consequences of legal risks, i.e. the change in the laws of the
country, Sub-Clause 4.12 addresses the allocation of risks concerning unforeseeable
physical conditions, and Sub-Clause 8.4 deals with the extension of time for
completion, especially in cases concerning exceptionally adverse climate conditions
and unforeseeable shortages in the availability of personnel or goods caused by
epidemics or governmental actions. For more about risk allocation see Klee (2015,
294–298). What is common for all these provisions is that they grant an extension
of time and/or the payment of costs to the contractor who suffered the delay and/
or incurred cost, or if that is going to be the likely outcome in the event of certain
specific impediments. None of these state that the party should be prevented from
fulfilling the obligation. Therefore, it seems that the FIDIC forms strive to protect
the contractor whose performance has become merely more difficult and ensure
that it will finish the works without suffering negative consequences due to those
impediments. Of course, all the circumstances that are mentioned in these clauses
could still potentially qualify as an exceptional event in terms of Clause 19 if they
fulfil the requirements listed therein. Their special position within the FIDIC was
never meant to prevent contractors from relying on Force Majeure, but merely to
provide them with a more accessible solution as the threshold for proving these
situations is clearly lower than the one required for Clause 19.
483
least with variations thereof.13 Therefore, it can be said the FIDIC forms
offer a traditional definition of force majeure events/circumstances that
can be found within the civil law family. Nevertheless, an emphasis on the
exceptionality of an event (or a circumstance) hints that the FIDIC drafters
wanted to make sure that only truly most adverse causes are included in this
clause. Moreover, some authors with common law background emphasise
the specificities of the FIDIC clause, and pinpoint that unforeseeability – the
usual prerequisite for existence of force majeure – is not explicitly mentioned
by the FIDIC. In their opinion, this further means that the FIDIC forms do
not know of this requirement (Corbett & Co 2016, 2).14 Foreseeability might
have been left out as a relic of the past,15 but that is not necessarily correct.
Clause 19 requires that a party could not have reasonably provided against
an event or a circumstance prior to entering into the contract. This wording
can be understood to encompass unforeseeability, as it may be argued that
if a party could have reasonably provided against something, then it would
have been foreseeable in the first place.
At this point, a useful reference can be made to the notion of force majeure
contained in different instruments of uniform law. The FIDIC commentaries
explicitly recognise that this clause largely resembles the one contained in
Article 7.1.7. of the PICC (Seppälä 2023, 1065).16 The PICC condition that
a party could not reasonably be expected to have taken the impediment
into account at the time of the conclusion of the contract is similar to the
FIDIC forms’ wording. In fact, the PICC leading commentary uses the term
‘foreseeable’ when referring to this condition. Simply put, a party cannot
rely on the impediment if that impediment, or rather its consequences
on the contract, were foreseeable by the obligor of the given obligation
(Pichonnaz 2015, 876–878). The same goes for Article 79(1) CISG, which
contains the almost identical wording as this paragraph of Article 7.1.7 PICC,
13
When discussing general principles of contract law, Brunner (2009, 75) notes
that force majeure provisions of different instruments of uniform law, i.e. the PICC,
CISG, Principles of European Contract Law (PECL), and International Chamber of
Commerce (ICC) Force Majeure Clause 2003, are ‘substantially the same’.
14
Conversely, Klee (2015, 370) claims that, under the FIDIC forms, force majeure
must therefore be an exceptional event, whether foreseeable or not.
15
The idea that nowadays hardly anything is unforeseeable, given the rapid
technological development, is not a new one and was recognised in Yugoslav
contract theory. See Krulj 1980, 351.
16
Art. 7.1.7. para. 1 PICC states that non-performance by a party is excused if
that party proves that the non-performance was due to an impediment beyond its
control and that it could not reasonably be expected to have taken the impediment
into account at the time of the conclusion of the contract, or to have avoided or
overcome it or its consequences.

even though it does not use the term ‘force majeure’. Authors commenting
on this provision also argue that the impediment must be unforeseeable to
excuse the party from performance (Milutinović 2005, 449).
Furthermore, Sub-Clause 19.1 para. 2 should also be taken into account
in defining force majeure under the FIDIC. This paragraph states that
Force Majeure may include, but is not limited to, exceptional events or
circumstances of the kind listed below, so long as conditions (a) to (d) above
are satisfied: (i) war, hostilities (whether war is declared or not), invasion,
act of foreign enemies, (ii) rebellion, terrorism, revolution, insurrection,
military or usurped power, or civil war, (iii) riot, commotion, disorder, strike
or lockout by persons other than the contractor’s personnel and other
employees of the contractor and subcontractors, (iv) munitions of war,
explosive materials, ionising radiation or contamination by radio-activity,
except as may be attributable to the contractor’s use of such munitions,
explosives, radiation or radio-activity, and (v) natural catastrophes such as
earthquake, hurricane, typhoon or volcanic activity. As the wording suggests,
this paragraph lists the events and circumstances which may constitute
Force Majeure under the FIDIC.17 The list goes beyond events that usually
represent ‘Acts of God’, that have their roots in natural causes and include
human-made events such as war (Chern 2020, 144).18 However, unlike
earlier versions of the FIDIC forms, this paragraph provides that events and
circumstances listed therein represent ‘Force Majure’ only if they qualify
as exceptional event or circumstance in accordance with the criteria from
previous paragraph (Burr 2016, 109–111).
On the other hand, Force Majeure is not limited to the events and
circumstances listed in this paragraph. If an event or circumstance meets
all the previously mentioned requirements, it constitutes Force Majeure.
As stated above, the drafters did not want to exclude liability just because
a certain type of event or circumstance occurred. The purpose of these
examples is indicative, i.e. they help the parties to detect force majeure
easier and to identify the range an event or circumstance should fall into in
17
Interestingly, some authors criticised the wording of item (iv) because the
items described therein do not constitute an event nor circumstance, but merely
a potential cause of events or circumstances that might later be considered force
majeure. See Corbett & Co 2016, 7.
18
This list has slightly been amended in the 2017 version of the Red Book. The
new Clause 18 separates events from item (iii), i.e. riot, commotion, disorder and
strike and lockout in two separate items, while it adds tsunami to the natural
catastrophes. Seppälä (2023, 1065–1066) even suggests further expansion of the
clause, which would include additional illustrative events, e.g. threat of war and
epidemics.
485
order to truly be considered exceptional (Seppälä 2023, 1064). Therefore,

no matter how exceptional an event or circumstance may be, it does not
have to amount to force majeure in two different situations. For instance,
the COVID-19 pandemic may qualify as an exceptional event, but not in
every case. It can be said that the contractor who concluded a contract in
late January 2020 probably could reasonably have provided against the
pandemic, while the one who entered a contract in April 2019 could not
have. As it can be seen, Sub-Clause 19.1 takes into account the disturbance
that the event created and how fair would it be to let the consequences fall
onto the debtor of the obligation; it does not merely focus on the type of the
event or circumstance. In any case, the purpose of this definition is to ensure
that Force Majeure is determined on a case-by-case basis.
Furthermore, the Force Majeure clause ensures the contractor does not
claim relief available to its subcontractors based on a broader definition
or different understanding of force majeure (under the subcontract or by
virtue of law applicable to the subcontract), even if its subcontractors are
entitled to such relief. In that regard, Sub-Clause 19.5 provides that if any
subcontractor is entitled, under any contract or agreement relating to the
works, to relief from force majeure on terms additional to or broader than
those specified in the Force Majeure clause, such additional or broader force
majeure events or circumstances shall not excuse the contractor’s non-
performance or entitle it to relief provided under the Force Majeure clause.
2.2. Consequences of the FIDIC Force Majeure
The purpose of including a force majeure clause in a FIDIC contract in

fact lies in the mechanisms provided in Force Majeure Sub-Clauses 19.4,
19.6 and 19.7, since they provide the consequences and the options at the
parties’ disposal when dealing with a Force Majeure.
It should be noted that these three provisions deal with different scenarios
and accordingly offer different defences to the affected party. In fact, these
‘scenarios’ might be considered as three different classes of inability to
perform the obligation. In other words, the more severe the impact of Force
Majeure on the party’s performance, the more drastic the tool it has at
its disposal. The FIDIC Force Majeure is specific in the sense that it deals
with contractual liability for late performance and with impossibility in
one clause, which is not always the case in civil law jurisdictions (including
Serbian contract law). The way the FIDIC Force Majeure is drafted helps

the parties to eliminate any doubt as to the concrete consequences of force

majeure, which might arise when the rules are scattered through different
provisions of the contract or a statute.
The effects of the three mentioned classes will be presented and analysed
in the following subsections. However, before turning to these effects, the
previously discussed condition – that the event or circumstance amounts to
Force Majeure only if the party cannot prevent or overcome it – should be
discussed. In light of that, the abovementioned consequences are subject to
two important duties of the party whose performance has been affected: the
duty to notify the other party of Force Majeure, and the duty to minimise
the delay.
The first duty – the duty to notify the other party – stems from Sub-Clause
19.2 which states that if a party is or will be prevented from performing any
of its obligations under the contract by Force Majeure, then it notifies the
other party of the event or circumstances constituting the Force Majeure,
specifying the obligations the performance of which is or will be prevented.
The notice must be given within 14 days of the party becoming aware, or of
when it should have become aware, of the relevant event or circumstance
constituting Force Majeure. The clause does not further state what would
be the effect of the failure to provide timely notice.19 Some authors argue
that an event that might otherwise constitute force majeure will not be
Force Majeure unless the notice procedure is correctly followed (Corbett &
Co 2016, 8) and this position seems correct, unless a pre-emptive provision
of the law governing the contract automatically releases the parties from
further performance in accordance with Sub-Clause 19.7.20
The second duty is laid down in Sub-Clause 19.3, which states that each
party will at all times use all reasonable endeavours to minimise any delay
in the performance of the contract as a result of Force Majeure. In addition,
it required the party to give notice to the other party when it ceases to be
affected by the Force Majeure. This clause is closely related to the well-known
duty to minimise damages in case the contract realisation is jeopardised.
19
The 2017 edition of the Red Book elaborates on the effect of timeliness of this
notice. Namely, Sub-Clause 18.2 contained therein provides that if a party does not
send the Force Majeure notice in time, i.e. within 14 days, but at a later time, then
it shall be excused from performance of the prevented obligations as of the date on
which this notice is received by the other party. Seppälä (2023, 1070) argues that
denying relief based on the party’s failure to provide a timely notice would be too
harsh.
20
However, even in this case, the party that fails to provide the other party with
timely notification might be liable for damages.
487
Both these duties ensure that only the party who did not contribute to the
adverse effect of Force Majeure and which managed the situation properly is
excused and spared of negative consequences.
2.2.1. Excusing the Prevented Party from Performance
As mentioned, Sub-Clause 19.2 starts by instructing the party prevented

from performing any of its obligations to provide the other party with a notice
describing the impediment and its impact on its contractual obligations. If
the party does so, it is excused performance of such obligations for as long
as such Force Majeure prevents it from performing them. In other words, the
party affected by the impediment is not be liable if the impediment amounts
to Force Majeure.
Interestingly, Sub-Clause 19.2 excuses the party which is prevented from
performing any of its obligations, but in its last paragraph it provides that
notwithstanding any other provision of the Force Majeure clause, application
of Force Majeure is excluded in the case of one of the parties being prevented
from making payments to the other party under the contract, and therefore
significantly limiting the scope of this clause. This means that the parties
cannot rely on financial hurdles when they want to seek the Force Majeure
related protection. However, the ‘notwithstanding any other provision’ part
of the clause suggests that this rule does not pre-empt any other provision
from Clause 19 that provides otherwise. This might be of further importance
for the application of Sub-Clause 19.7, which will be discussed later in this
paper.
When it comes to the obligations of the contractor, who is affected more
often than the employer,21 the wording of Sub-Clause 19.4 suggests that this
provision should be read together with Sub-Clause 19.2 (Corbett & Co 2016,
8–9). Namely, Sub-Clause 19.4 stipulates that the contractor affected by
Force Majeure is entitled to the extension of time and payment of eventual
costs (but note that reimbursement of costs is not available in all cases).22
However, the rights from this Sub-Clause are subject to initiating the FIDIC
21
It is important to note that Sub-Clause 19.2 para. 3 provides that notwithstanding
any other provision of that clause, Force Majeure does not apply to the obligations
of either party to make payments to the other party under the contract.
22
The last paragraph of Sub-Clause 19.4 provides that after receiving the notice,
the Engineer shall proceed in accordance with Sub-Clause 3.5 dealing with
determinations, to agree or determine these matters.

claim procedure from Sub-Clause 20.1,23 but some authors suggest that the
contractor will have met these obligations by giving the notice referred to in
Sub-Clause 19.2 (Corbett & Co 2016, 8–9).
The first remark is that the FIDIC forms merely require that a party
has been prevented from performing its obligations by virtue of force
majeure. This ensures that the affected party is excused even in cases where
performance did not become impossible (after all, the consequences of
impossibility are addressed in a separate provision which will be discussed
later). However, it does not further specify what ‘prevented’ means in terms
of the FIDIC forms. Some authors argue that events or circumstances that
merely make it more difficult for the party to perform its obligations, do
not constitute Force Majeure under the FIDIC forms, as Clause 19 does
not represent a general risk allocation provision (Corbett & Co 2016, 8).
Considering the general purpose of force majeure clauses, this interpretation
seems correct. The idea is not to make an excuse for a party that is perfectly
capable of performing its obligation, but to protect the future of the contract
by facilitating the performance to the affected party which would otherwise
suffer adverse consequences.
Subclause 19.2 might also be helpful in determining what is meant
under the wording ‘prevented’. As mentioned, this provision provides that
the party, having given notice, is excused performance of such obligations
for so long as such Force Majeure prevents it from performing them. ‘For
so long as’ clarifies that the agency of force majeure event/circumstance
should be temporary. Thus, this Sub-Clause refers primarily to cases of
temporary impossibility where a party objectively cannot do anything in
order to perform its obligation, but that impossibility is not permanent.
After all, the FIDIC forms contain special provisions for some cases where
the performance has become merely more difficult.24 This means that the
FIDIC forms deal with ‘lighter’ obstacles separately and that the Force
Majeure clause is reserved for more detrimental outcomes.
In any case, the purpose of these two Sub-Clauses is to discourage the
creditor from terminating the contract straight away (but it does not prevent
it), which is considered unjust in cases where the contractor is temporarily
23
This procedure has been deemed controversial in civil law systems and has
initiated much discussion about its validity. Namely, this provision provides that
the party will be precluded from submitting its claim after expiry of a specific time
limit, the legal nature of which and its consequences may be irreconcilable with the
mandatory provisions of the LOO. For different approaches see Nikčević 2021 and
Babić, Pelicarić 2019.
24
They are briefly presented in subsection 3.3. of this paper.
489
prevented from performance (Jankovec 1993, 77). The idea is to suspend

the contractor’s obligations by excusing it from the performance and
granting it some extra time. This provision might especially be useful where
applicable law does not explicitly provide for suspension of performance
where temporary impossibility occurs, which is the case with Serbia’s LOO,
as discussed later in this paper.
But the FIDIC goes beyond suspending the performance, it also entitles the
contractor to payment of costs in some cases of Force Majeure. As explained
in Sub-Clause 19.4 item (b), the party can ask for payment of costs in cases
of human-induced force majeure, but not where it is the result of natural
catastrophe. Even in those cases the contractor is restricted by an additional
requirement – the event or circumstance preventing it from performing the
obligation must occur in the country where the work is taking place, except
in the case of war, hostilities, invasion, or act of foreign enemies. The latter
ones always justify the request for payment of costs.
2.2.2. Optional Termination
As previously mentioned, the parties usually do not want to terminate the

contract where performance of some obligation has merely been prevented.
That position is reflected in FIDIC Sub-Clause 19.6, which justifies termination
only in the case of the performance being suspended for a certain period.
According to the FIDIC forms, a party is allowed to terminate the contract
only if 1) execution of substantially all the works in progress is prevented and
2) where that suspension in performance due to Force Majeure lasts for a
certain period or is repeated frequently. In this case, it is more likely that the
contract will become useless for one or both parties, which is why termination
is justified. If only part of the works is affected, allowing termination would
seem radical and would create uncertainty for both parties.
Specifically, Sub-Clause 19.6 reads that should the prevention last for a
continuous period of 84 days or for multiple periods totalling more than
140 days, due to the same notified Force Majeure, then either party may
give the other party a notice of termination of the contract. The termination
takes effect seven days after the notice is given, and the contractor proceeds
in accordance with Sub-Clause 16.3 dealing with cessation of work and
removal of equipment. Therefore, the notice is a requirement in case of
Force Majeure related termination, i.e. it is not automatic.

Of course, the employer is always allowed to terminate the contract for

convenience,25 but this special force majeure inspired ground for termination
allows the contractor to terminate the contract under equal terms (which
is not the case when terminating for convenience) and to ensure that the
consequences of this termination are the same as those when the employer
terminates for convenience, since in both cases the contractor is not to
blame for termination.26
With this provision, the FIDIC acknowledges that when performance
is suspended for a time period of a certain length, it brings the parties’
relationship closer to that of permanent impossibility, which deserves
special attention.
2.2.3. Discharging the Parties from Performance
The FIDIC standard forms also deal with the worst-case scenario for the
parties’ – the impossibility to perform the obligation. In this case the FIDIC
provides what national legal systems usually do – it discharges the parties
from further performance.
The application of Sub-Clause 19.7 is broader than the application of
the previously discussed clauses as it states that the parties are discharged
from further performance of their obligations in the case that any event or
circumstance outside the control of the parties (including, but not limited to
those that fall within the definition of Force Majeure from Sub-Clause 19.1)
induces such an impossibility. The same effect is accorded to any event or
25
This ground for termination is found in Clause 15.5 (Employer’s Entitlement
to Termination) of the 1999 Red Book. For specifics of the FIDIC standard forms’
termination reasons and their comparison with the LOO regime in Bosnia and
Herzegovina see Gagula, Meškić 2020.
26
Sub-Clause 19.6 para. 2 provides that upon such termination, the Engineer
shall determine the value of the work done and issue a Payment Certificate which
shall include: (a) the amounts payable for any work carried out for which a price
is stated in the Contract; (b) the Cost of Plant and Materials ordered for the Works
which have been delivered to the Contractor, or of which the Contractor is liable to
accept delivery: this Plant and Materials shall become the property of (and be at
the risk of) the Employer when paid for by the Employer, and the Contractor shall
place the same at the Employer’s disposal; (c) any other Cost or liability which in
the circumstances was reasonably incurred by the Contractor in the expectation of
completing the Works; (d) the Cost of removal of Temporary Works and Contractor’s
Equipment from the Site and the return of these items to the Contractor’s works
in its country (or to any other destination at no greater cost); and (e) the Cost of
repatriation of the Contractor’s staff and labour employed wholly in connection
with the Works at the date of termination. The same is provided in Clause 15.5.
491
circumstance outside of parties’ control that makes performance unlawful,

or which under the law applicable to the contract entitles the parties to be
released from further performance of the contract.
The FIDIC forms, thus, distinguish between factual and legal impossibility,
as they require that the event or the circumstance beyond the parties’
control make performance impossible or unlawful. In civil legal systems
such distinction is unnecessary because impossibility is a broader notion,
encompassing both mentioned impossibilities. It may, however, be dubious
in different legal systems whether the term impossibility encompasses only
physical impossibility or commercial impossibility as well. For example,
common law regimes place great emphasis on the actual wording of the
clauses (Bunni 2005, 499–500), which might also explain why the FIDIC Force
Majeure clause makes the abovementioned difference between impossibility
and unlawfulness. In any case, paying close attention to the wording further
means that if a clause does not state explicitly that impossibility is physical,
a lawyer with a background in common law might argue that commercial
or economical impossibilities are also covered by the contract (Corbett &
Co 2016, 18). These commentators argue that since financial impossibility
is not excluded from the clause, it falls within the scope of Sub-Clause 19.7
and that the contractor might be released from performance if “the costs of
continuing the contract are so far above the price it has agreed to perform
for that it is unable to raise enough finance to continue” (Corbett & Co 2016,
21). Conversely, lawyers with a background in civil law will resist the idea of
economic impossibility and will stick to the dichotomy of legal and factual
impossibility understood from an objective point of view (Jankovec 1993,
62–65). This means that the confusion as to the real meaning of this term
is possible and the unravelling of this dilemma has important practical
implications since the party wanting to rely on this provision will be
discharged from performance. In that regard, it is worth mentioning that the
newest FIDIC commentary lists only physical impossibilities when discussing
impossibility to perform. Therein Seppälä mentions two examples from case
law that explain what might constitute impossibility according to the FIDIC:
first one being the situation where the construction site was washed away
in a flood, rendering performance of the contract impossible, and the second
one stating that there was impossibility when construction was prevented
by a rebellious army (Seppälä 2023, 1084–1085). Some other authors even
straightforwardly state that ‘impossible or unlawful’ in this Sub-Clause
‘essentially covers legal and physical impossibility’ (Baker et al. 2009, 503).
Moreover, even the commentators who argue that the notion of impossibility
goes beyond the physical impossibility admit that it might be argued that
anything that can be changed by a variation order cannot be considered
impossible (Corbett & Co 2016, 21). Newer versions of the clause dealing with

consequences of impossibility, Sub-Clause 18.6 in the 2017 FIDIC edition,

condition discharging the parties from further performance with previous
attempts to modify the contract, if such modification is possible. Specifically,
the Sub-Clause provides that the parties are discharged from performance
upon one party’s notice to the other only if the parties are unable to agree on
an amendment to the contract that would permit the continued performance
of the contract. This means that the parties should enable the contract to
continue where that is still possible (Seppälä 2023, 1084). In the context of
1999 Sub-Clause 19.7, the previous provision may only be used to clarify
that FIDIC forms do not intend to accept the notion of absolute impossibility,
but rather a more flexible and practical understanding.
In any case, the previous discussion demonstrates that it is not quite
clear what is meant by ‘impossibility’ under this clause, and it would be
preferable if parties would further elaborate in their contract on it meaning,
to avoid any doubts as the FIDIC attaches serious consequences to cases of
impossibility.
Moreover, Sub-Clause 19.7 provides that the parties may be discharged
from performance not only where the performance became impossible or
unlawful, but also in cases where applicable law releases the party from
performance due to certain events/circumstances beyond the parties’
control. This addition shows that the FIDIC forms were never intended to
limit the parties’ options in cases where their contract is influenced by an
external event, nor to impose a restrictive understanding of impossibility.
The FIDIC merely ensure that impossibility discharges the parties from
further performance, but also instructs them that it does not preclude them
from relying on other available defences or doctrines releasing them from
performance under the applicable law (Baker et al. 2009, 498, 503).
Finally, as in all other cases discussed in this section, the party seeking the
release must notify the other party of the event or circumstance from this
Sub-Clause. The discharge is of an immediate effect (Baker et al. 2009, 503).
3. INTERPLAY BETWEEN FIDIC AND LOO CONCEPTS OF FORCE

MAJEURE
As mentioned, the FIDIC forms are rooted in common law, yet the
endeavours to attract parties from different legal systems led to the need
to adapt to different conceptual understandings. For instance, the FIDIC
abandoned the common law concept of frustration of the contract and
replaced it with a more civil law-like force majeure clause (Bunni 2005,
493
530). Nevertheless, lawyers with a non-common law background should

nevertheless carefully assess the meaning of this clause and how it relates to
the concepts laid down in their domestic legal systems, as their application
may be pre-empted by the FIDIC forms, or the Force Majeure clause may be
invalidated in whole or in part by operation of the otherwise applicable law.
For this reason, this section aims to present the interplay between Serbia’s
contract law and the FIDIC forms. Of course, all these conclusions operate on
the presumption that Serbian law is applicable law under the contract.
3.1. Importance of Determining the Legal Nature of the LOO

Provisions
When dealing with force majeure under the LOO, the starting point should
be locating all relevant rules concerning their consequences. It quickly
becomes clear that the LOO does not deal with force majeure (or vis major
as it is usually referred to in local legal circles) within a single provision like
the FIDIC forms do, nor does it use the said terms in describing this legal
institute. Rather, the LOO contains different institutes dispersed in different
provisions which deal with events of vis major in a different manner.27
Before analysing all these rules separately, one crucial remark to the
nature of the LOO provisions should be made: they are dispositive in nature.
This means that parties are free to stipulate their contractual relationship as
they please and to derogate from default rules, which is today embodied in
the principle of party autonomy across most legal systems. However, party
autonomy as provided in the LOO is not without its limits. Article 10 LOO
states that parties must stay within the limits of compulsory legislation,
public policy, and good faith. This somewhat limited understanding of
contractual freedom helps establish a dichotomy between mandatory and
non-mandatory statutory provisions under Serbian contract law. In other
words, some rules are compulsory and cannot be changed at the whim of
the parties, while on the other hand, some rules are dispositive in nature
and can be altered by the parties in their contract.
27
There are general rules on contractual liability stipulating what is the impact
of force majeure on the party’s liability. In a different section, the LOO regulates
situations where force majeure made it impossible for the party to fulfil its
obligation. Lastly, the Law contains special rules when performance of the obligation
has not become impossible, but more onerous, or the purpose of the contract was
frustrated due to the operation of force majeure.

In any case, the entire LOO operates under the presumption that the
parties can derogate from default rules as provided in Article 20 LOO (Hiber
2022, 455).28 This broad and general limitation of the party autonomy
requires determining compatibility of the agreed terms with this limitation
in each specific case (Hiber 2022, 459). However, if a rule is compulsory, the
LOO provision might (and it often does) expressly state that the parties may
not derogate from it,29 while in other cases, this will stem from the nature
of the provision.30 Hiber emphasises that specific limitations in the LOO are
usually drafted in a manner that either prohibits or orders the parties not
to derogate from them (Hiber 2022, 459–460). On the other hand, he argues
that in light of the presumption that the parties are allowed to derogate from
the LOO provisions, expressly stating in a non-mandatory provision that it
will be applicable “unless provided otherwise in the contract” is redundant
and creates unnecessary dilemma in practice as to whether the provisions
not containing this or similar wording can be considered non-mandatory at
all (Hiber 2022, 460).
However, this does not mean that dispositive rules do not have the same
significance as the parties. They are still legally binding, and parties must
abide by them if they did not choose to alter them. The only way to avoid
the application of these rules is to derogate their application. Therefore, the
meaning of ‘non-mandatory’ is that the parties did not use their right to
modify their contract. This logic applies to all rules equally, including those
related to the consequences of force majeure.
The discussion above may be useful when assessing the validity of a
particular contractual term. It is even more important when dealing with
bespoke forms that are influenced by different legal systems and thus
require careful scrutiny, since what is valid under one country’s law, does
28
Parties may regulate their obligation relations in a way that is different than
the one specified within the law, unless something else follows from a specific
provision, or from its general meaning.
29
For example, Art. 364 expressly states that parties cannot alter, i.e. establish a
longer or shorter period of unenforceability due to the statute of limitations than
the one set forth by statute, nor they can suspend unenforceability for a given
period.
30
A useful example is the analysis of effectiveness of waiver of claim clauses
under domestic and akin legal systems in Živković (2020, 92). Waivers represent
one method of deviating from default rules and the finding is that they may be
ineffective and invalid not only where their ineffectiveness is expressly regulated
by the statute, but also in other instances, as is the case with other contractual
terms. Živković further proposes a useful two-step test for establishing so-called
waivability of a claim which might be used in general when determining the nature
of a provision. For more on this test see Živković 2020, 92–94.
495
not have to be valid under another’s. The same applies to the FIDIC forms,
regardless of how useful or practical their solutions might be. For instance,
validity of provisions providing a special time bar for submitting the claim
under the FIDIC claim procedure has been closely examined from the LOO
perspective as the answer is not that straightforward (Nikčević 2021; Babić,
Pelicarić 2019). Therefore, a proper understanding of the nature of the LOO
provisions that correspond to concepts contained in the FIDIC forms is a
necessary first step.
3.2. FIDIC’s Attempt to Elaborate on the LOO’s Provisions on

Contractual Liability
Returning to the regime of force majeure under the domestic LCT regime,
the general rule is found in Article 263 LCT which deals with contractual
liability. According to this provision, the debtor is released from liability for
loss provided that it proves its inability to perform the obligation, or that the
delay in performing its obligation was due to circumstances that occurred
after the conclusion of the contract and which it was unable to prevent,
avoid or overcome – which is traditionally been understood as vis major in
domestic legal literature (Jankovec 1993, 98; Karanikić Mirić 2019, 46).31
The LOO is explicit as to the parties’ ability to amend this rule. The parties
are free to change the default standard and consequently extend or limit and
exclude the liability in accordance with Articles 264 and 265 LOO. However,
this freedom is not without its boundaries: in both extremes (extension
and exclusion of liability), the parties are limited by certain standards and
principles. Therefore, the parties wanting to exclude their liability cannot
do so in the case of intention or gross negligence, nor can they extend the
liability if that would be in contravention with the principle of good faith and
integrity.32
31
In Skica, an older draft document that influenced the LOO, created by Mihailo
Konstantinović, Art. 208 merely states that the debtor will be released from liability
in the case of vis major or another external cause for which it is not responsible,
without going into further definition of what qualities or traits the cause should
have. See Konstantinović 1996, 102.
32
Article 264 para. 2 provides that the creditor cannot rely on the provision
excluding liability contrary to the good faith principle, but it does not state that that
clause is invalid. It is possible that the drafters did not intend to make these clauses
invalid, but rather to give the court an option to avoid their application. In the latter
case, the court must assess the ‘fairness’ of the application of such clause in every

It has already been discussed in legal doctrine that the force majeure
clauses represent a typical form of excluding liability (Jankovec 1993, 367).
Of course, a clause that is named ‘force majeure’ can also have the opposite
effect and extend the liability of the party. For instance, Jankovec (1993,
367) explains that by operation of default rules the manufacturer would be
liable if a fire occurs within its factory since that is not an external event,
but that the parties are free to exclude its liability in such cases. The parties
are equally free to provide that the debtor will be liable in cases where it is
liberated by default rules – in this case by providing that all cases of fire will
not represent a vis major and therefore will not be the reason for exclusion
of liability (because, perhaps, the area is susceptible to fires and the parties
wants the debtor to take that fact into account).
In any case, when it comes to the FIDIC forms’ Force Majeure clause, one
thing is clear – it replaces the definition of vis major from Article 263 LOO.
However, the Clause 19 definition of force majeure does not seem drastically
different from the one required by the LOO. Indeed, the FIDIC forms require
that the exceptional event or circumstance could not have been reasonably
provided against before concluding the Contract, and the domestic LOO
does not. The LOO does not mention the foreseeability of a circumstance
whatsoever. However, this still does not mean that a party will always be
released from liability when they could have foreseen a circumstance.33
Parties are still required to act in accordance with specific standards of
care,34 in addition to their general obligation to act in accordance with the
principle of good faith.35 Therefore, Article 263 LOO can be interpreted
in a way that does not allow a party to rely on a circumstance that was
foreseeable at the time of the conclusion of the contract.36 If the party acts in
accordance with the required standard of care, it may be able to anticipate
the adverse event, prepare for its effects and take appropriate measures
to prevent it from affecting the contractual obligation. Therefore, it can be
argued that unforeseeability is implicitly required by the general principles
of contract law.
particular case. If this provision were to lead to an outcome that is unfair, the court
will simply not apply the clause (but it will not declare it void and the creditor may
rely on it in another case).
33
Unlike the FIDIC forms’ Force Majeure, the LOO is confined to the term
circumstance without mentioning the event. However, this does not constitute
a change or deviation since, as noted by some authors, the term circumstance is
broader and might encompass the term event. See Krulj 1980, 648.
34
Art. 18 LOO.
35
Art. 12 LOO.
36
But there are opposing views. See Krulj 1980, 649; Jankovec 1993, 122–123.
497
Furthermore, it is notable that Article 263 LOO requires that the debtor
could not have prevented the occurrence of the given circumstance, overcome
its effects, or avoided negative the consequences it creates (Jankovec 1993,
116–120), while the FIDIC forms merely require that the party could not
reasonably have avoided or overcome Force Majeure. Nevertheless, the
purpose of both sets of rules is the same – the party must take reasonable
measures to mitigate the influence and try to surmount it. Furthermore, the
fact that the circumstances could not have been prevented means that they
were beyond the party’s control, which is the explicit FIDIC requirement as
already discussed above.
Finally, the remaining condition – that Force Majeure must not be
substantially attributable to the other party – is encompassed by the civil
law understanding of vis major as something outside the sphere of the
parties’ agency in general (Konstantinović 1996, 102).
In any case, due to these reasons, I believe that the Force Majeure
definition does not constitute a deviation from the domestic notion of vis
major that would have a different outcome in practice. This position is further
supported by the fact that the way that both the FIDIC Force Majeure and the
LOO define force majeure implies that it should always be determined on a
case-by-case basis, in accordance with all the particularities of the case.
Yet, the true improvement that the FIDIC forms’ Force Majeure brings
to the domestic LOO lies elsewhere. Its significance is demonstrated in the
legal consequences that the clause attaches to the agency of these events.
3.3. Suspension as Primary Solution to Temporary Inability to

Perform
The FIDIC Force Majeure provides that the party whose obligation (any
obligation) is affected by force majeure shall be excused from performance
of such an obligation, for so long as such force majeure prevents the party
from performing it, provided that the party gives notice, describing in detail
force majeure and its impact on specific contractual obligations. On the
other hand, Article 263 LOO merely states that the party shall be released
from liability for loss in case of vis major. This is a crucial difference between
the two regimes and an important contribution of the FIDIC Forms.
The difference is that the L is phrased rather broadly, without considering
certain specific situations that might be of practical relevance. It seems
that this provision deals with situations where a vis major event occurs at

the time when the deadline for performing the obligation lapses.37 Article
263 LOO is also usually considered alongside provisions dealing with
permanent impossibility, and not in other cases (Jankovec 1993, 75), but
the major oversight of the LOO is that it does not prescribe what happens
when impossibility occurs during the performance of the contract but stops
before the lapse of deadline. Will the party be ‘excused’ if it did not fulfil its
obligation in time but because of an adverse situation that lasted for only a
while during the performance?
Attaching adequate legal consequences to temporary impossibility to
perform might be crucial for construction contracts, which often suffer
due to various external causes preventing contractors from performing the
work. Merely stating that the contractor will be released from liability is not
sufficient in cases where performance of the obligation has a more permanent
character – which is precisely the case with construction contracts. Jankovec
(1993, 72) criticised this approach and advocated the introduction of specific
rules de lege ferenda, finding that cases of temporary impossibilities must be
equipped with extending the time for performing the obligations, since the
primary need should be to preserve the contract, not to terminate it, which
would be the case with permanent impossibility. According to him, a time
extension should be granted regardless of the debtor’s responsibility for the
impossibility, while liability for damages is a separate issue from the party
ensuring successful implementation of the contract.
What the FIDIC forms provide is the suspension of the contract for the
duration of the impediment and providing the contractor with additional
time when it is the affected party suffering the delay.38 The idea is to ensure
that the contract stays in place and that the affected party does not suffer
37
It may be argued that this is Jankovec’s position as well, but not stated as
straightforwardly. He discusses that in case of a temporary impossibility, the
creditor has Art. 126 para. 2 at its disposal, stating that the creditor may terminate
the contract because the debtor did not fulfil its obligation in time but after giving
the latter subsequent time for performance. For more details see Jankovec 1983,
74–76.
38
The FIDIC forms are not the only rules used in the construction industry that
recognize the need to allow time extension in cases of external impediments.
The construction business is largely dependent on practices in the industry, and
it requires that contractual terms go hand in hand with these practices. Domestic
practices were codified in 1970s in Special Usages on Construction (Posebne uzanse
o građenju, Official Gazette of the SFRY No. 18/77) which expressly stipulated that
the contractor is entitled to request an extension of the deadline in cases where it
was prevented from performing the works due to changed circumstances (Usage
42). The legal nature of these usages is similar to that of the FIDIC forms, and if
parties want them to be applied, they must include them in their contract, as stated
in Art. 21 para. 2 of Serbian LOO.
499
any negative consequences in the event of Force Majeure. That is precisely

what the LOO lacks (or at least does not offer as a straightforward solution).
Clause 19 of the FIDIC does not refer to temporary impossibility explicitly,
it only states that the party should be prevented from performance, but
as already explained above, this term should be interpreted restrictively
since the idea is to provide the party with adequate remedies only in truly
exceptional cases, which undoubtedly includes situations of temporary
impossibility.
Interestingly, the FIDIC Force Majeure clause goes even further when
allowing the contractor to request payment of costs incurred due to a force
majeure event in cases where that request would be appropriate (which is
not a usual consequence, but having in mind the rationale of facilitating the
performance of the contract, it represents a useful contribution of FIDIC
forms.
3.4. Termination as Alternative Possibility
Another important contribution of the FIDIC forms concerns the specific

grounds for terminating the contract due to reasons of force majeure;
the FIDIC regime defines how long the parties are expected to tolerate
suspension of performance.
Namely, when the inability to perform is temporary, it is not justified to
terminate the contract right away. However, it would not be reasonable to
expect from the parties to put up with the given inability for an indefinite
period (even when it is certain that inability is temporary). For that reason,
the FIDIC forms provide that both parties can terminate the contract after a
certain period of time. After that time lapses, the FIDIC forms consider that
the force majeure’s impact on the contract had become more severe and that
the parties deserve a remedy that is more rigorous – the right to terminate.
Still, the contract cannot be terminated in all cases where the contractor
would be granted an extension of time and/or payment of costs, e.g.
when delay/costs occurred because the contractor was prevented from
performing any of its obligations. Unlike Sub-Clause 19.2, Sub-Clause 19.6
allows termination only where execution of substantially all the works in
progress is prevented. This rule is in line with the rationale from Article 131
of the Serbian LOO which forbids termination in cases where a minor part of
obligation has not been performed.

Since neither of the parties is responsible for force majeure, FIDIC allows
both parties to terminate the contract in such cases, but the employer still
must pay certain expenses incurred by the contractor, which are listed in
Sub-Clause 19.6 para. 2.
On the other hand, the general rule of the LOO is that the creditor is allowed
to terminate the contract when the debtor fails to fulfil its obligation by the
date stipulated in the contract.39 Where the deadline was an essential term of
the contract, termination is automatic upon lapse of time for performance.40
If the deadline is not an essential term, then the creditor must provide the
other party with subsequent time to perform its obligation. If it fails to do so,
the contract is terminated automatically. Of course, the employer is always
allowed to terminate the contract where the contractor did not execute the
work, but also, it could terminate for convenience in accordance with Article
629.41
The FIDIC forms, in fact, closely regulate the possibility of terminating the
contract in case of temporary prevention where the time for performance
still has not lapsed.
Notwithstanding previous reasons for termination, the FIDIC also allows

termination for convenience and, just like domestic law, it gives this possibility
only to the employer. As this is exclusively the employer’s privilege, and if it
terminates for convenience, it will have to pay for the same expenses as in
the case of termination due to Force Majeure.
3.5. Impossibility to Perform: FIDIC vs. LOO
Under Serbian law, impossibility to perform is one of the ways of

cessation of all obligations in general, not only contractual ones. In the LOO,
the consequences of impossibility to perform are contained in Article 354
39
Art. 125 para. 1 LOO.
40
Art. 126 LOO.
41
In the event that the employer decides to terminate for convenience, Art. 629
LOO provides that it is supposed to pay to the contractor the stipulated fee, reduced
by the amount of costs not incurred by the contractor, which would otherwise have
been incurred if the contract remained in effect, along with the earnings received by
the contractor elsewhere, or which it intentionally passed up.
501
LOO. According to this provision, in the event that the impossibility occurred
for reasons for which the debtor is not responsible,42 the obligation ceases
to exist in any case.43
However, where impossibility affects the performance of an obligation
stemming from a reciprocal contract (which construction contracts
undoubted are) the contract in whole is affected.44 In fact, Article 137 para. 1
LOO states that the obligation of the other party’s obligation ceases as well,
provided that neither of the parties are responsible for the impossibility.
The rationale for the position that the impossible obligation ceases to exist
leads to the conclusion that it is mandatory and cannot be amended. When
performance of an obligation becomes impossible, there is no logical reason
to maintain that party’s obligation in force, as it simply cannot be performed.
Therefore, it appears that including provisions providing for a different
legal destiny of the obligation in the event of a subsequent impossibility to
perform is not permitted. When it comes to FIDIC Sub-Clause 19.7, which
stipulates that the parties are discharged from their obligations in the event
that their performance becomes illegal or impossible, or when parties are
released from performance by operation of the governing law, its existence
in the contract might seem may appear futile as it does not add to the LOO’s
position but only confirms its position.
However, the Serbian law does not merely state that the contract ceases
to exist, it also explains what the other consequences of subsequent
impossibility are. Namely, the subsequent impossibility does not render the
contract invalid. Legal theory states that the contract is either automatically
terminated (Karanikić Mirić 2020b, 31), or that it continues to exist as a
legal fact despite the fact that obligations contained therein ceased to exist
(Jankovec 1982, 79).
42
Jankovec (1982, 75) claims that the obligation should cease to exist even when
one of the parties is responsible for it.
43
Legal doctrine and case law have addressed on various occasions what kind of
impossibility, and it is presently accepted that impossibility should be subsequent,
total, and permanent, while it can be both legal and factual in nature. For more
details see Krulj 1980, 356–357; Jankovec 1993, 51–81; Karanikić Mirić 2020b,
43–49. Apart from that, an obligation must be individual and not generic since
performance of the latter remains possible.
44
The LOO uses the term ‘bilateral contracts’ in the heading of Section 5. This
section actually deals with contracts where the purpose lies in reciprocity, i.e. in
the exchange of mutual obligations. As stated in Radišić (2008, 125), one party
undertakes to perform its obligation only because the other party promises to
perform its obligation.

Regardless of which position one might deem justified, this divergence

may be used to explain why the LOO provides specific rules dealing with
consequences of impossibility to perform. The first one can be found in
Article 137 LOO which stipulates that if the performance of the obligation
of the other party from the reciprocal contract is still possible and if it fulfils
that obligation in part, then it is entitled to restitution. On the other hand,
Article 356 LOO stipulates that the debtor whose obligation ceased to exist
is still required to transfer to the creditor any right it would have against
a third person responsible for such impossibility. Read together, these two
rules imply that restitution is not possible in all cases. In the scenario from
Article 356, the creditor receives something in return which further means it
should not be put in a better position than the debtor and hence should not
be entitled to full restitution in that case.
Moreover, legal doctrine emphasises that the LOO rule providing restitution
in case of termination is not adapted to the specifics of construction contracts
where restitution is simply not possible (Vukmir 2009, 503). Precisely for
that reason authors argue that termination of contracts with long-term
obligations termination takes effect ex nunc (from that moment on), while
everything that has already been done remains valid because it cannot be
simply erased (Milošević 1980, 345–346; Radišić 2008, 168; Jankovec 1982,
166). This position suggests that neither situation should justify enrichment
at the expense of the other party and the same applied to the impossibility
to perform.
Finally, if we take Jankovec’s (1982, 79–80) position that the rule providing
that the other party’s obligation ceases due to its debtor’s impossibility to
perform is dispositive in nature, then the parties may freely allocate the
risk of such an impossibility and it does not matter whether the contract is
terminated or not.
Returning to the FIDIC Force Majeure clause, items (a) and (b) of Sub-
Clause 19.7 explain that the release from performance does not affect the
rights of either party regarding any previous breach of the contract and
provides that the contractor is entitled to payment of the same costs and
sums as in case where the contract is terminated due to reasons of Force
Majeure. By doing this, the FIDIC forms go beyond the position that the
contractor should be paid for any work carried out and shifts some other
costs to the employer.45
45
I was referring to the costs provided in items (b) to (e) of Sub-Clause 19.6 para. 2.
503
4. CONCLUSION
This paper attempted to demonstrate that despite different conceptual

understandings of force majeure under the FIDIC forms (in particular, the
1999 version of the Red Book) and the LOO, the FIDIC Force Majeure is
convenient when concluding construction contracts for complex projects.
Its validity from the perspective of domestic law does not seem disputed
and its common law origins should not create any greater confusion when
contracting under these forms.
Namely, it has been shown that the notion of force majeure under the
FIDIC showcases endeavours to make these forms closer to civil law systems
as its broad definition, providing qualities of force majeure rather than
listing specific impediments, resembles the understanding of continental
legal systems, including the one contained in Serbian law.
Moreover, the way that the FIDIC Force Majeure deals with consequences
seems rather simple as it focuses on the real impact of the force majeure
impediment and makes the difference according to its severity when
attaching legal consequences. First, the FIDIC forms merely state that a party
shall be excused when it is prevented from performing any of its obligations
by reasons of force majeure (i.e. Force Majeure, as previously defined). For
contractors this is of particular importance as they are entitled to a time
extension when in delay, and to payments if they incur certain specific
costs. Second, if the inability to perform substantially all works lasts for a
certain time or reappears for the same reason, both parties are allowed to
terminate the contract. And finally, if the performance of parties’ contractual
obligations becomes impossible or unlawful, or if the parties are released
from further performance by virtue of governing law, the FIDIC forms
discharge the parties from further performance.
However, the FIDIC forms, as a means of allocating certain risks, do not
always require impediment to constitute Force Majeure in order to provide
the contractor with a time extension and payment of costs. There are other
terms dispersed across the forms that grant the contractor that right.
Finally, through the lenses of the LOO, the FIDIC forms’ Force Majeure
brings many contributions. Namely, by excusing the party and providing
contractors a time extension, it solves the question of what happens with
temporary inabilities to perform the contract, which represents a gap
in the domestic regime. Accordingly, it can be deduced that under FIDIC
forms, termination represents an alternative means in case of agency of
force majeure, which should be used only when justified, which has been
argued as necessary in domestic literature. Moreover, it seems that the FIDIC

Force Majeure-induced impossibility to perform does not diverge from the

LOO’s position significantly, providing that the contractors are entitled to
certain costs it incurred in relation to the works, in addition to the usual
reimbursement for the works already performed, as dictated by the rules on
unjust enrichment.
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Article history:
Received: 31. 5. 2023.
Accepted: 13. 8. 2023.

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UDC 347.441.144.3:69(497.

Sara STOJKOVIĆ, LL.M. (Cantab.)*

FIDIC FORCE MAJEURE CLAUSE FROM THE VIEWPOINT OF

The purpose of this paper is to present force majeure as stipulated in FIDIC

Key words: FIDIC General Conditions. – Force majeure. – Impossibility

1. INTRODUCTION: A CONCEPTUAL ALIGNMENT

478 Анали ПФБ 3/2023

performance became impossible or more onerous (Murdoch, Hughes 2008,

480 Анали ПФБ 3/2023

that, a doctrinal assessment is necessary for proper understanding of the

2. FIDIC’S ‘BETTER SAFE THAN SORRY’ APPROACH

As noted by legal scholars, the FIDIC Red Book is heavily influenced

2.1. Defining Force Majeure Under FIDIC

As a creature of contract, the FIDIC’s force majeure clause is mostly

482 Анали ПФБ 3/2023

484 Анали ПФБ 3/2023

order to truly be considered exceptional (Seppälä 2023, 1064). Therefore,

2.2. Consequences of the FIDIC Force Majeure

The purpose of including a force majeure clause in a FIDIC contract in

486 Анали ПФБ 3/2023

the parties to eliminate any doubt as to the concrete consequences of force

2.2.1. Excusing the Prevented Party from Performance

As mentioned, Sub-Clause 19.2 starts by instructing the party prevented

488 Анали ПФБ 3/2023

prevented from performance (Jankovec 1993, 77). The idea is to suspend

2.2.2. Optional Termination

As previously mentioned, the parties usually do not want to terminate the

490 Анали ПФБ 3/2023

Of course, the employer is always allowed to terminate the contract for

2.2.3. Discharging the Parties from Performance

circumstance outside of parties’ control that makes performance unlawful,

492 Анали ПФБ 3/2023

consequences of impossibility, Sub-Clause 18.6 in the 2017 FIDIC edition,

3. INTERPLAY BETWEEN FIDIC AND LOO CONCEPTS OF FORCE

530). Nevertheless, lawyers with a non-common law background should

3.1. Importance of Determining the Legal Nature of the LOO

494 Анали ПФБ 3/2023

3.2. FIDIC’s Attempt to Elaborate on the LOO’s Provisions on

496 Анали ПФБ 3/2023

3.3. Suspension as Primary Solution to Temporary Inability to

498 Анали ПФБ 3/2023

any negative consequences in the event of Force Majeure. That is precisely

3.4. Termination as Alternative Possibility

Another important contribution of the FIDIC forms concerns the specific

500 Анали ПФБ 3/2023

Notwithstanding previous reasons for termination, the FIDIC also allows

3.5. Impossibility to Perform: FIDIC vs. LOO

Under Serbian law, impossibility to perform is one of the ways of

502 Анали ПФБ 3/2023

Regardless of which position one might deem justified, this divergence

This paper attempted to demonstrate that despite different conceptual

504 Анали ПФБ 3/2023

Force Majeure-induced impossibility to perform does not diverge from the

[11] Conrad, Michael. 2023. Applying FIDIC Contracts in France. 226–264

506 Анали ПФБ 3/2023

[25] Klee, Lukas. 2015. International Construction Contract Law. Oxford:

508 Анали ПФБ 3/2023

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