COVID-19 and Contractual Obligations under Jordanian Defense Law

By: Dr. Nida’ N. Goussous
Talal Abu-Ghazaleh Legal


COVID-19 pandemic caused the issuance of the Royal Decree approving the Cabinet’s decision to proclaim the Defense Law no. (13) for the year 1992 taking effect across the Hashemite Kingdom of Jordan as of March 17, 2020 according to a Royal Court Statement. 

By applying the Defense Law in Jordan, a lockdown has been declared all over the country, which affected many aspects of life. Economic sectors are the most affected from the execution of the said Law.

Many questions were raised regarding the performance of  contracts, mainly continuous contracts, in light of the current circumstances and whether the non-performance or the partial performance thereof shall be considered a breach of contract or the application of the available legal excuses of non-performance, namely force majeure event or the what so-called hardship event is possible in this context.

General legal rules which govern contractual obligations are provided under the Jordanian Civil Code Bo. (43) of the year 1976.

Article (205) of the said Law deals with the event of emergency circumstances or the so-called Hardship event.  It is the case where the agreed contractual obligations are basically still possible in principle, though certain underlying circumstances have occurred and/or changed, which render the proper fulfillment of these obligations unforeseeable to the debtor and shall leave him with huge losses which does not make any economic sense. The Law provided in this regard that the contract in this event shall be under the control of the court.

Force majeure event is provided under Article (247) of the Jordanian Civil Code, it deals with cases where the performance of contractual obligations has become impossible due to the occurrence of circumstances, which are beyond the control of the parties; despite the fact that all precautionary measures to avoid the effect of these circumstances had been taken, eventually the contract shall be considered terminated.

Jordanian Legislator has provided for the case of non-performance of contractual obligations under Article (11) of the Defense Law, which stipulates that: “If it is impossible to implement any contract or obligation due to observance of the provisions of this law or any order, mandate or instructions issued pursuant to it or due to compliance with these provisions, the person associated with this contract is not considered to be in breach of its terms, but the contract is considered suspended to the extent that the implementation of the contract is impossible and is considered a defense in any lawsuit brought or brought against that person, or any measures taken against him as a result of not implementing the contract or obligation”.

The reading of article (11) of the Defense Law means that the non-performance of contractual obligations during the application thereof requires the parties in a contract to apply the said article (11). Accordingly, the non-performed contracts shall be considered suspended, whereas such suspension does not contradict with the terms of the contract and the affected party cannot claim compensation.

Suspended contracts are not defined in the Jordanian Civil Code, though article (171) provided for cases which must be considered a legal suspension of contracts, one of which is the case which is provided by law, i.e. the case provided under the said article (11) of the Defense Law. 

The re-execution of suspended contracts requires the consent of the affected party in order to be enforceable subject to article (172) of the Jordanian Civil Code 

It is to be highlighted that the Legislator has provided for a condition in order to apply article (11) of the Defense Law, by requiring an evidence that proves an even which renders the implementation of the contract impossible. The burden of proof shall be on the party who claims the existence of such an event. 

In light of the above, considering the application of above indicated events, whether force majeure, hardship or an event provided under article (11) of the Defense Law in order to avoid a lawsuit of a breach of contract, requires the existence of the conditions for each event which must be decided in light of the relevant circumstances to each sector, the respective contract is related thereto, and in case parties in a contract were not able to reach an agreement in this regard, the competent court will resolve the dispute, in order to apply the legal repercussions for each event.