Spain: Can COVID-19 be used to seek the suspension, variation or termination of commercial agreements?

Spain, like all other European countries, is taking decisive steps to contain the coronavirus and safeguard both public health and the Spanish economy. However, the government's decisions focus largely on healthcare and public security, labor protection, and extraordinary economic measures – but they do not tackle the point of business contracts.

The COVID-19 outbreak is having a substantial impact on the economy. It is putting Spanish companies and businesses under a lot of pressure. Many of them are not capable of performing their contractual duties, or are very likely to fail on their obligations in the near future.

This places companies in front of a dilemma: on the one hand, the contractual terms agreed by the parties is their "law" and sets the foundation of each party's rights and obligations which must be observed as originally set out in the agreement; but on the other hand, surely the current extraordinary circumstances can constitute valid grounds to be exempt from complying with the agreement as originally planned – or can they not?

Read More: Can COVID-19 be used to seek the suspension, variation or termination of commercial agreements in Spain?


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