[Direct answer]In the Beijing area, force majeure does not mean that "each party bears its own losses" or "full exemption from liability", but rather partial or full exemption from liability in accordance with Article 590 of the Civil Code of the People's Republic of China, and is subject to the premise of the performance stage and risk allocation. If a party is unable to perform the contract due to force majeure, it may be partially or fully exempted from liability, unless otherwise provided by law; if the party delays performance and force majeure occurs afterwards, it shall not be exempted from liability. The party that has suffered losses has the obligation to mitigate the losses. If it fails to take appropriate measures and causes the losses to be expanded, it shall not request compensation for the expanded part. The key actions are to notify the other party in time and provide proof within a reasonable period. It is recommended that the party that is hindered immediately send a letter explaining the situation and attach official certificates to fix the evidence of exemption from liability and losses. For more details, please refer to the following link:Business and contract dispute resolution services for enterprises.

I. Problem background and typical scenarios

The force majeure clause is frequently activated in events such as the pandemic, natural disasters, and government regulations. Typical scenarios include: factories being forced to stop production due to sudden control measures, resulting in failure to deliver on time; disruptions in transportation channels causing delays and damage to goods; service contracts being terminated due to policy cancellations of large-scale events; and construction projects being delayed due to extreme weather. In practice, both parties often argue fiercely about "who bears the losses": the buyer claims that the seller should refund the prepayment, while the seller argues that force majeure exempts them from liability and no refund is required. There is also a tendency for parties to "use force majeure as an excuse" to evade normal commercial risks. For projects and deliveries, the following can be considered:Real estate sales and construction project servicesEvaluate the extension of the assessment and the boundaries of the claim.

II. Key points of dispute

There are three focal points of dispute regarding the sharing of losses due to force majeure. Firstly, whether it truly constitutes force majeure: it must simultaneously meet the criteria of unforeseeability, unavoidability, and insurmountability. Ordinary market fluctuations do not constitute force majeure. Secondly, the performance stage: if the breach of contract (delay) occurs first and the force majeure occurs later, the defense of exemption from liability is usually not supported. Thirdly, the obligation of mitigation and notification: whether the hindered party promptly notifies, provides evidence, and submits official certificates directly affects the scope of exemption from liability and the expansion of loss assumption. For cases involving the recovery of funds, reference can be made to the relevant provisions.Creditor-debtor relations and enforcement case servicesClaim for return or settlement.

III. Professional analysis by Hengluo Lawyers

Based on our practical experience in handling contract disputes, the most common problem in force majeure cases is the "timing of notification and evidence collection". Hengluo Lawyers usually advise clients to send a written notice of force majeure to the other party as soon as possible, attaching materials such as government announcements, meteorological or traffic control certificates, and clearly claiming exemption from liability or extension of time limit, rather than providing evidence after the fact. More importantly, mitigation of losses is crucial: the party affected by the obstruction should actively take reasonable measures such as alternative transportation, product diversification, or alternative procurement to prevent losses from escalating. Otherwise, it will be difficult to obtain support for the expanded losses. The counterparty is also prohibited from using the opportunity to maliciously terminate the contract. For the return of deposits or advance payments, the matter should be handled in accordance with the nature of the contract and the rules of risk burden, and it cannot be claimed that all payments should be refunded without exception. For cases involving enterprise supply chains, follow-up measures can be taken accordingly.Business and contract dispute services for enterprisesCoordinate the interconnected effects of multiple contracts.

IV. Practical suggestions and legal basis

The legal basis is Article 180 (General Provisions on Exemption from Liability Due to Force Majeure) and Article 590 (Force Majeure in Contracts: Notification, Proof, and Scope of Exemption from Liability) of the Civil Code of the People's Republic of China (effective January 1, 2021), Article 591 (Rules on Mitigation of Losses) and Article 604 (Transfer of Risk of Damage to the Subject Matter). Practical suggestions: The party encountering obstacles shall immediately notify the other party in writing and attach official certificates; submit details of the force majeure and an assessment of its impact within a reasonable period; actively mitigate losses and preserve expenditure receipts; determine the handling of advance payments and deposits in accordance with the contract provisions; the other party shall respond promptly upon receipt of the notification and avoid hastily terminating the contract. For cross-border contracts, the above provisions may be applied in conjunction with relevant international laws and regulations.\nFinancial capital and cross-border services involving foreign affairsCheck the force majeure clause and the provisions regarding the law applicable to the contract.

5. Hengluo Law Firm's Advice

Force majeure is a statutory exemption from liability, but it is by no means a simple formula of "free from penalty" or "total loss at one's own expense". Please remember three points: First, force majeure occurring after a delay does not exempt from liability, and the state of performance of the contract is a prerequisite; Second, it is necessary to notify and provide evidence in a timely manner. Silence or providing evidence after the fact will weaken the defense; Third, there is an obligation to mitigate losses. If the losses continue to expand, the party concerned will bear the responsibility themselves. As for the retention of advance payments and deposits, they should be handled in accordance with the contract and the rules of risk burden. If necessary, they can negotiate to modify or terminate the contract. It is recommended to include the force majeure clause, notification, proof, and mitigation mechanism in the contract as preliminary agreements. For more contract risk prevention, please refer to the relevant materials.Intellectual property protection and corporate legal services.

VI. Frequently Asked Questions

Q1: If the loss is caused by force majeure, can I be exempt from liability or not compensate in full?

If a party is unable to perform the contract due to force majeure, it may be partially or fully exempted from liability according to law, but this does not mean automatic full exemption. Whether exemption from liability is possible and the scope of exemption depend on whether the force majeure is truly established, whether it occurred during the performance period (exemption from liability does not apply if it occurs after the delay), whether the party has timely notified and provided evidence, and whether it has fulfilled its obligation to mitigate losses. If the above requirements are met, the party may claim exemption from corresponding breach of contract liability; however, it still needs to bear responsibility for the part of the expanded losses caused by its own fault. It is recommended to evaluate the situation against the above requirements first, and never disguise commercial risks as force majeure. The outcome should be determined by facts and evidence, rather than promises.

Q2: To claim force majeure, what evidence do I need to prepare?

The core evidence includes: official documents (government announcements, weather or traffic control certificates, quarantine notifications) proving the objective existence of force majeure; a causal explanation of the event and the inability to perform the contract; written records (emails, letters, and delivery certificates) notifying the other party in a timely manner; materials submitted within a reasonable timeframe; and proof of mitigation measures and expenditure certificates. The organization of evidence should focus on the following aspects: "unforeseeable, unavoidable, and insurmountable—occurring during the performance period—notifying and providing evidence—mitigating losses". The more complete the materials are, the more stable the claims for exemption from liability and sharing of losses will be. If necessary, you can apply to the court to retrieve public event records.

Q3: If I hire a lawyer to handle a force majeure dispute, what would the approximate cost be?

The litigation fees shall be calculated in accordance with the "Measures for the Payment of Litigation Fees" based on the amount of the litigation subject and shall be borne by the losing party. The attorney's fees shall be charged on a piecework basis or based on a percentage of the litigation subject, depending on the complexity of the case, the amount of the litigation subject, and the workload. There is no unified national standard for this, and the specific fees shall be subject to the terms of the entrustment contract. In cases involving force majeure, which often involve multiple pieces of evidence and causal demonstrations, it is recommended to require the law firm to provide a detailed fee breakdown before entrusting them with the case, clarifying whether the fees include travel expenses, appraisal fees, and litigation fees, to avoid price increases during the process. It is also advisable to weigh the attorney's fees against the potential exemptions from liability or refunds that can be obtained before initiating the case.

Q4: How long do litigations related to force majeure typically take?

The first-instance ordinary procedure generally concludes within six months, and the summary procedure within three months; defenses of exemption from liability with clear facts and sufficient evidence can often apply the summary procedure, with a shorter timeframe. If it involves loss appraisal or causality investigation, the ordinary procedure period will be longer. If there is an appeal, the second-instance procedure generally takes three months. The enforcement of the judgment will be handled separately after it takes effect. Overall, simple force majeure defenses often require several months from case filing to adjudication. It is recommended to complete the collection of notification and supporting materials before suing, shorten the time for fact investigation during the trial, and apply for property preservation when necessary.

Q5: If an unforeseen event occurs, what should I do specifically?

It is recommended to proceed in five steps: First, immediately send a notice of force majeure to the other party in writing, stating the event, its impact, and the proposed exemption from liability or extension of the time limit; Second, submit detailed information within a reasonable timeframe, accompanied by official certificates (announcements, meteorological or regulatory documents); Third, actively take mitigation measures (alternative transportation, production transfer, or alternative procurement) and keep the expense receipts; Fourth, calculate the advance payments, deposits, and loss sharing in accordance with the contract and legal provisions, and actively propose amendment or termination plans; Fifth, if no agreement can be reached, initiate litigation or arbitration within the statute of limitations. It is crucial not to suspend performance or remain silent without reporting the situation, as this may result in the loss of the right to claim exemption from liability.

The above answer is based on the judicial practice in Beijing. The judicial interpretation in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Beijing Hengluo Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.