Highlights From Securitization News

Abstract

For project finance transactions, which take place largely in developing countries that are subject to unstable environments, special attention is required in the drafting of project agreements. In that connection, force majeure events (known also as frustration, impossibility, impracticability, Imprevision and Wegfall der Geschaftsgrundlage) pose a major risk to the success of projects. The fact that the parties to the transaction are generally from different countries, with different legal systems and contract law, requires the drafters of project agreements to be particularly careful, since a contract9s enforceability will depend on the language of the provision and how it is triggered according to the law that governs the contract. The article examines how different systems of law (common law, civil law, CISG, Unidroit, and the EU law) and different theoretical approaches to contract law deal with force majeure events and provides practical advice for drafters of project agreements to allocate and minimize that risk.