The obligee can no longer invoke these clauses during this period, and the obligor thus has a further two-month period after the termination date of health emergency to fulfil its obligations (i.e. - to date - until 24 July 2020). 

This provision benefits any obligor who has breached one of its contractual obligations within a specified period, without distinction as to the cause of the breach: thus, unlike in the case of a Force Majeure event, the failure to perform or the breach does not have to be necessarily directly attributable to the health crisis in order to paralyze these clauses. It is deemed to be. It should not even have explored alternative solutions.

Finally, it is provided that the price of late payment penalties and the enforcement of penalty clauses that took effect before 12 March 2020 are "suspended" from that date until the expiry of a one-month period from the termination date of health emergency.

The report to the French President concludes that the seized Courts may terminate all measures pronounced before 12 March 2020 in application of these clauses.

Article 5 of the Ordinance: extension of the period for termination and the deadline for notifying the termination of a tacitly renewable contract until 24 August 2020 (to date)

The Ordinance refers to the case where the parties are entitled to terminate the contract during a given period and to notify the termination of a tacitly renewable contract within a given period.

As soon as this right to terminate or to notify expires between 12 March 2020 and "the expiry of a period of one month from the date of cessation of the state of emergency", it is extended by two months after this period, i.e. - to date - until 24 August 2020.

A "super force majeure" is thus implemented for the next four and five months. The end of this period of paralysis should clearly be anticipated.

Client Alert 2020-168