Spain - How COVID-19 affects contractual obligations




1. INTRODUCTION

A state of alert has been declared. This is an exceptional regime, established in the Spanish statal legislation, which allows the Government to take severe measures in situations of "serious disturbances to normality", ranging from disasters or public misfortunes to "health crises, such as epidemics or serious pollution situations", such as the one we are dealing with (and worrying about).

The measures of Royal Decree-Law 8/2020 states the closure and cessation of commercial activity, hotels, restaurants and some other sectors. The opening of retail premises and establishments to the public is also suspended, with some exceptions.
According to the survey carried out 1 a few days ago by the Consumer and User Organization (OCU in Spanish) in relation to the coronavirus epidemic or Covid-19: 48% of those surveyed fear contagion, but the majority (73%) confess to being mainly concerned about the damage this situation will cause to the economy and its consequences.

The concern is unavoidable: “if my company closes down, will I be out of work?”, “What if I do not lose my job but my salary is reduced?”, “What if my expenses continue, but the income suddenly ceases to exist?” or “What if I made a commitment but now I may not be able to fulfill it?”

And what if I have to fulfill it, even if I can't? How does force majeure operate? How do I deal with the contracts I signed in the short term that may still be affected by Covid-19?

It is undeniable that the cessation of activity and the nationwide consumption and provision of services restriction directly affect the obligations and commitments established in the contracts, greatly compromising its compliance.

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