Originally from Force Majeure and Hardship in the Asia-Pacific Region

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Questions

I.     Force majeure

A.    Background and definition of force majeure in the Philippines

1.    Does the Philippines recognize force majeure or any other legal concept similar to force majeure such as frustration, etc. (in the following: “force majeure”)? Are there any statutory provisions or is there any case law setting forth the definition of force majeure?

The Philippines recognizes the concept of force majeure as provided for in Article 1174 of the Philippine Civil Code which states that, except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen were inevitable.

In the case of Republic v. Luzon Stevedoring Corp., the Philippine Supreme Court defined caso fortuito or force majeure (which in law are deemed identical insofar as they exempt an obligor from liability) as extraordinary events that are not foreseeable or avoidable, “events that could not be foreseen, or which though foreseen, were inevitable.” It is, therefore, not enough that an event could not have been foreseen or anticipated. It must also be impossible to foresee or to avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same.

In order to constitute a caso fortuito or force majeure that would exempt a person from liability under Article 1174 of the Philippine Civil Code, it is necessary that the following elements must concur:

(i)    the cause of the breach of the obligation must be independent of human will (will of the obligor);

(ii)   the event must be either unforeseeable or unavoidable;

(iii)  the event must be such as to render it impossible for the obligor to fulfill his obligation in a normal manner; and

(iv)  the obligor must be free from any participation in, or aggravation of the injury, to the obligee.

That the extraordinary circumstance is independent of the will of the obligor is an essential element of force majeure.