The impact of Tariffs on international contracts in Eslovénia

Guida paese

« Torna all'elenco guide
Change country

Duties are not paid by foreign governments (as Donald Trump repeatedly claimed during the electoral campaign) but by the importing companies in the country that imposed the tax on the value of the imported product. In the case of the Trump administration's recent round of tariffs, that means U.S. companies. Similarly, Canadian, Mexican, Chinese, and European companies will pay the import duties on U.S.-origin products imposed by their respective countries as a trade retaliation measure against U.S. tariffs.

Can a country's imposition of duties or equivalent measures constitute force majeure or hardship and allow the party concerned to suspend, renegotiate or terminate the contract?

We asked Legalmondo's lawyers, experts in international trade, to answer these questions according to their countries' law and case law.

Eslovénia

Can increase in tariffs be considered force majeure under Slovene law?

When the contract does not include a specific clause governing force majeure, the Slovenian Obligations Code (hereinafter: Code of Obligations) is applicable. Force majeure as a specific institute is not regulated by the Code of Obligations.

However, an increase in tariffs may be considered a relevant change of circumstances. The Code of Obligations provides that certain changes in circumstances after the conclusion of the contract may be grounds for a rescission of the contract. Such a rescission of the contract must be done within a court proceeding. The party seeking rescission must demonstrate the existence of the following cumulative conditions:

  • the circumstances have arisen after the conclusion of the contract;
  • the circumstances render the performance of obligations by one party more difficult or such that the purpose of the contract cannot be achieved;
  • the circumstances caused a situation where the contract clearly no longer complies with the expectations of the contracting parties;
  • it would be unjust to retain the contract in force as it is.

High tariffs may meet all the above criteria, however, that is dependent on the circumstances of the contract. It is important to note that case law regarding this institute is very strict. Rescission of a contract is not possible in the following situations:

  • the circumstances are foreseeable;
  • the circumstances arise once the plaintiff is already late regarding their obligations;
  • the circumstances were caused by risks that are customary in such contracts.

Slovenian courts have not yet ruled on whether an increase in tariffs may be seen as a relevant change of circumstances. However, if the contract was signed after the election of president Trump, the plaintiff may not be able to prove that the circumstances were unforeseeable. Additionally, the other party may present the argument that a change in tariffs is a customary risk in contracts dealing with international trade.

It is also important to note that the party seeking rescission may only seek judicial rescission and not a judicial amendment to the contract. However, the opposing party may offer to have the relevant contract condition justly amended. If a just amendment to the conditions of the contract is offered, such an offer precludes the option of a rescission.

Suzana Bončina Jamšek

Can the increase in tariffs justify renegotiation for hardship?

If there is no specific clause in the contract governing the issue of renegotiation for hardship, Slovenian law does not require that the other party renegotiate the agreement. However, as presented in the answer to the previous question, one party may preclude the other party from seeking judicial rescission of the contract on the grounds of a relevant change in circumstances by offering to amend the contract so that it is no longer unjust.

Suzana Bončina Jamšek

Can prices be renegotiated due to the increase in tariffs?

Parties may renegotiate their contracts willingly at any time. If there is no specific clause in the contract governing renegotiation, no legal provisions impose obligations for renegotiation.

Suzana Bončina Jamšek
Choose country