Framing the Covid-19 Pandemic as a Force Majeure Clauses to Escape Debtor’s Liability

Abstract

The COVID-19 pandemic severely caused great turmoil in Indonesian living memory. It affected public activities, specifically the business sector. Many businesses collapsed, and workers lost their jobs, causing unemployment. The accompanying government legal policies included the determination of the pandemic as a non-natural disaster and the large-scale public health orders. Business debtors are most likely attempts to escape their contractual obligations based on force majeure clauses. This paper analyzes whether the COVID-19 pandemic is a force majeure under Indonesian law that sought to escape debtors’ liability. The study elaborates on a qualitative approach and focuses on obtaining data through in-depth analysis and case study research. The normative juridical approach further elaborates to refer to the applicable laws, regulations, and legal doctrines. The result of the study appraised the readers that force majeure defense escapes the debtors’ liability against nonperformance claims by the creditors. Force majeure is a contractual provision that relieves performance obligations in case of a circumstance or event went beyond the control of a party and occurs subsequent to the contract coming into effect, rendering the obligations of such contracts impossible to perform. The debtors may stand on the ground that a default occurred due to an unexpected event, and it shall exempt a liability as there was no element of malice; it was unintentional due to force majeure.