Entrepreneurial Risk in Conditions of Economic Crisis: Analysis of Law Enforcement Practice

Abstract

The significance of the risk category is generally recognized in Russian civil law. This institution becomes even more relevant in times of crisis, in times of economic instability and market volatility. An analysis of current judicial practice demonstrates that during the COVID-19 coronavirus pandemic and the introduction of sanctions restrictions, entrepreneurs were often forced to resort to amendment and termination of contracts due to a significant change in circumstances and to file claims for exemption from liability for violation of contractual obligations due to the occurrence of the force majeure. Russian courts apply these legal institutions in close connection with the category of business risk, however, due to the lack of a legal definition of this term and the wide variety of concepts of risk in legal doctrine, judicial discretion plays a significant role in resolving cases. Extremely broad discretionary powers of judges and legal uncertainty regarding business risk can lead to destabilization of civil law transactions and negatively affect the economic development of Russia. In this regard, the author advocates consolidating the concept of business risk, as well as its permissible and justified limits, if not at the legislative level, then at least in the explanations of Russian higher courts.