The Private Law in Greece is based on free will viz the ability of persons to freely and autonomously form their fortune relations with exception that either the law or any other principles of morality are not violated.
The basic principle of the Contract Law is that each side should stick to the obligations and comply with the rules by fulfilling them, which principle is known as “pacta sunt servanda”.
Derogations from the above mentioned exists on the article 388 of the Greek Civil Code, according to which if the facts that each side was based on to form their contract were transformed and the reasons were extraordinary and could not be predicted. If from this change the debtor has a loss and the provision in comparison with the consideration is burdensome, the court according to its judge and after the request from the debtor can adapt the provision and make ends meet for the entire contract or even to the point that the agreement could not be executed.
According to the above mentioned article the conditions that the contract parties can lean on and request from the court the reduction of the debt to the appropriate one, are one of the following:
- The alteration of incidents according to good faith and transactional ethics, that the sides were based to sign their agreement.
- The alteration should take place after the sign of the agreement and must be based on extraordinary reasons that could not be predicted.
- The alteration has led to the point that the debtor has no interest in fulfilling the procedure of the contract.
There is a precondition that the parties of the contract were aware of the general content of it during the timeline that they were to sign it and their agreement was based specifically on them. The change of facts that led to the differentiation to the content of the agreement should have changed afterwards and must be extraordinary. For this reason the parts could not have predicted this turn of the facts based on normal economic situations. Moreover, this impact to the outcome of the agreement can be caused only by a burdensome situation which changes the whole plan and cannot be encountered by adjustments to the agreement or by any variation to it. In this situation the debtor faces stretchable conditions and will have to deal with a great loss if he continues the pact. So the article 388 of the Civil Code deals with the excess of the burden and the courtroom will intervene by adjusting the provision against the consideration.
Retained or unpredictable reasons can be incidents that will not take place to usual order of things but are caused by uncertain, political, economic, or social circumstances such as war, earthquakes, pandemics etc. and the parts could not predict it when they contracted the initial agreement.
Furthermore, the article 288 of the Civil Code states that “the debtor has the obligation to fulfill the provision according to good faith and transactional ethics” and can be used on any guilt with exception the use of the article 388 of Civil Code which is used when the fulfill of the contract is opposite to the uprightness and honesty where all transactions should rely on, so it would be eligible to adapt according to general-objective criteria which could be found to transactions to the point that the requirements of good faith to the transaction would be fulfilled.
Since 11-03-2020 and for over two months of the appearance of Corona Virus and the spread to all over the world, all governments took serious measurements to protect their citizens. The first steps that took place in Greece to prevent the spreading of the virus were : the closure of schools after that the suspension of operation of the commercial shops, thence the suspension of courtrooms occurred and afterwards the prohibition of citizen circulation.
These unfamiliar circumstances led to the suspension of the courtrooms since 11.3.2020 which was voted and notified by the Greek Government (ΦΕΚ τ. Α’ 55) and for the first time in modern Greece there was suspension to the deadlines for the legal procedures and to all the legal services that would betide during the lockdown to the courtrooms or to the competent district attorneys or to the statute of limitations of the relative claims.
The impact of the above measures smites the economic life of our country and obstructs the development of the already concluded contracts and agreements of professionals.
If the pandemic or epidemic has been predicted by the parties as a reason for force majeure to fulfill the obligations of the parties, then the parties will follow the agreed way of resolving the issues that will arise (unless the agreed terms are very abusive for one side, so they can still be prosecuted for that).
However, in the event that this is not provided in the contract and the parties are unable to find an out-of-court solution, then they can go to court in order to request from it to decide on the termination of the whole contract or of part that has not yet been executed.
Of course, we have not encountered same case law in recent years, but we consider that the emergency measures that took place to prevent the spread of the Covid-19 virus and in fact within a short period of time are an extraordinary and unpredictable reason as required by Article 388 of Civil Law.
However, the biggest issue that arises in this case is the duration of the measures and their effect on the subsequent economy of the country, since the lifting of the imposed measures will not mean our return to normalcy. Some sectors such as tourism are expected to be irreparably affected, with the result that the recession will last for many months after the lifting of measures.
Therefore, the question of whether the spread of the Covid-19 virus is an extraordinary and unpredictable reason for the abnormal development of the contract and the duration of its effects in order to balance the obligations of the parties, it is expected to be dealt with in case law.
