The impact and consequences of the coronavirus (Covid-19) pandemic as an event of default in contracts

Abstract

Direct damages caused by an event of default, as a rule, are incurred by the debtor. There are certain situations, however, where the effects of non-performance cannot be incurred by the debtor had he not acted in any way to cause the event of default, such as situations involving unforeseeable circumstances or force majeure. In this sense, the coronavirus (Covid-19) pandemic has affected the performance of several contracts, either wholly or in a partial way. In such cases, should the debtor be held liable for the default? Shall the Covid-19 pandemic be considered an unforeseen case where the debtor has no liability at all? What solutions does the Brazilian Civil Code provide for these kinds of situations? The answer to these questions shall be the aim of the present paper.