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Corona and watersports

The following article is intended only as a general legal contribution and does not claim to comprehensively discuss the current state of the law on the above subject and is certainly not to be understood as concrete legal advice. Currently, everything is in flux and much depends on what the relevant authorities will specifically decide now and in the future. Furthermore, each water sports case is unique and must be assessed/examined on an ad hoc basis based on the specific circumstances of the case.

The events seemed very far away a month ago, but now it has become very close for many people, and also for the water sports enthusiast the virus will now have consequences, hopefully not personally in terms of health, but in terms of your beloved possessions or planned trip.

There is a lot of uncertainty about how to deal with Corona measures in water sports. What about my rental agreement for a (motor) yacht if there is a travel ban? What if I don’t want to take any risks and therefore decide – even without a travel ban – not to start the charter?

What about my marina? If I am not allowed to sail, I do not want to use my berth and I do not want to pay for it. What about the winter storage? If I am not allowed to enter the country to get the boat ready to sail, do I have to pay more if the winter storage has to go beyond the originally agreed time? In short, a lot of questions and not really much clarity at the moment. That said, I will try to make the current situation a legal reality.

Many of the questions relate to the contract that was made with a shipyard/company. The agreements that are relevant to water sports are those of rental and leasing of recreational boats and winter storage and leasing of moorings. These agreements are governed by the so-called general terms and conditions. The most commonly used are the Hiswa conditions and the general conditions of the NJI.

Force majeure.
Agreements must be respected, that is the rule. If this does not happen, action can be taken against this breach on the basis of (for example) misconduct. However, this would not always lead to justice: Sometimes the party that fails to perform the contract is not at fault at all. In this case, one can speak of force majeure.

In the case of force majeure, as mentioned above, the failure cannot be attributed to the debtor. That is, the failure is not due to the fault of the debtor, nor is it for his account according to the law, according to a legal act, or according to general opinions (“the generally valid opinions”, says the law in Article 6:75 BW).

Whether force majeure exists in a particular case is examined in light of the circumstances of the case. Therefore, it is not possible to establish a general rule for when an appeal to force majeure will succeed and when it will not.

What matters now is that governments have now enacted concrete measures to contain the virus in a number of areas. For example, comparably, as of March 16, 2020, all lifts in the Alpine countries were suspended and all winter sports activities effectively ended.

Basis for government action.
The first question is: Can a government in the Netherlands simply take measures to close the hospitality industry, for example? Answer: yes, the (local) government has this power and it is based on the so-called Wet publieke gezondheid. In this WPG, diseases are divided into categories and in category A, the government has the right to take all kinds of far-reaching measures related to public health, such as closing businesses and the like.

Specifically, this means that the actions the government is now taking may result in a particular party being unable to perform an agreed-upon service simply because that party’s service is prohibited.

In this situation, it is a case of force majeure for that party. Although this party is unable to perform, this is not due to the actions of this party. Therefore, as the other party, you cannot enforce the performance in question, even though you may have paid for it in the meantime. If you are not allowed on board, this is not a circumstance for which the lessor is responsible. Your boat will remain at the berth, so you will still have to pay.

Conversely, if you are banned from boarding, it may be force majeure, but the boat will remain in winter storage. Should this be at the expense of the landlord?

So the big question is, who gets charged for the financial consequences of government decisions? Some agreements explicitly state that force majeure is not to be borne by the party that cannot perform for that reason. In this case, the risk is on the other party under all circumstances.

The Hiswa and NJI terms and conditions do not mention anywhere what is to be done in case of force majeure. However, there are provisions that refer to the right to terminate the agreement in the event of an attributable defect. However, as noted above, one must take into account that the defect is not attributable to the company and whether dissolution is therefore possible is the question. Sometimes (according to the Hiswa Lease and Rental Conditions) it is possible to dissolve in case of non-performance by the contractor, but if this non-performance is not attributable, the customer cannot claim compensation.

Article 9 of the NJI Lease Terms and Conditions provides that the lessor may suspend the performance of its obligations if it is temporarily prevented from performing its obligations due to circumstances that could not have been anticipated at the time the contract was entered into and that are beyond its control. It is therefore a kind of force majeure clause. It does not include the right to dissolve!

In all situations that are not provided for in the general terms and conditions or in the contract, the law/judge must provide clarity, and this is then done through article 6:248 of the Dutch Civil Code, which contains the so-called reasonableness and fairness. What is ultimately decent to achieve a reasonable solution for both parties in situations that are not provided for in the agreement, and at whose expense will a financial loss be?

At the moment, this is not clear. Perhaps the government will implement all sorts of compensation schemes for different sectors (e.g., the hotel and restaurant industry, which also had to close involuntarily), but this situation is open at the moment; governments have other concerns at the moment.  As soon as we know more, we will inform you!

Tip: In the case of contracts that have already been concluded, where the service has not yet been provided and not yet paid for, it is advisable to consult with the other party about terminating the contract. After all, you are threatened with paying for something you know the service cannot be provided! In any case, check in advance whether the other party will be able to perform/deliver the service.

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"You have the right to a lawyer who tells it like it is!"

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