International trade continues to be shaped by global geopolitical developments in 2025. It is an indisputable fact that geopolitical risks heavily affect international trade. Global conflicts, security threats at strategic transit points and political tensions between economic blocs directly influence the legal framework of commercial relations. These developments make risk arrangements in international sales, distribution, transportation and production contracts increasingly critical. As such, the protection of commercial contracts against unforeseeable and uncontrollable events has become a practical necessity rather than a theoretical consideration. Indeed, global developments have led to protectionist measures in the face of unpredictable price increases, geopolitical risks and environmental concerns. Thus, current circumstances necessitate a review of force majeure and performance obligations in contracts.
In this context, the most frequently used legal mechanisms are “force majeure” and “hardship” clauses. These two concepts come into play when the contractual balance between the parties is disturbed, making it possible to renegotiate obligations, especially in times of crisis.
The concept of “force majeure” generally refers to the inability of a party to fulfill its duties, liabilities and obligations due to unforeseeable and unavoidable events beyond the reasonable control of the parties. According to Force Majeure and Hardship Clauses published by the International Chamber of Commerce (“ICC”) in 2020, force majeure refers to events and circumstances such as war, civil war, export bans, currency and trade restrictions, embargoes, sanctions, or serious government interventions.
To establish the existence of force majeure, certain criteria must be met. Accordingly, the impediment in question must be beyond the reasonable control of the party affected by it, and this impediment must be of a nature that it could not reasonably have been foreseen at the time of conclusion of the contract. Force majeure may also be defined as a situation that prevents the affected party from fulfilling one or more of its contractual obligations, insofar as it can demonstrate that the effects of the impediment could not reasonably have been avoided or overcome.
The concept of “hardship”, on the other hand, refers to situations where the performance of a contract is not impossible, but becomes an excessive economic or commercial burden for one of the parties. This includes unforeseeable circumstances, such as sudden changes in exchange rates, raw material costs, energy supply or transportation charges, especially in long-term international contracts, which one of the parties will have to bear in the performance of the contract. In such cases, the ICC’s 2020 hardship clause entitles the parties to request renegotiation of the contract. Thus, the hardship clause offers different options to the parties while adhering to the “favor contractus” principle to preserve the contract as much as possible.
Accordingly, upon the invocation of a hardship clause, the parties to a contract are bound, within a reasonable time, to negotiate alternative contractual terms that will reasonably allow them to overcome the consequences of the event. However, in order to invoke the hardship clause, the relevant party must prove that a) the continued performance of its contractual duties has become excessively onerous due to an event beyond its reasonable control which it could not reasonably have been expected to have taken into account at the time of the conclusion of the contract, and that b) it could not reasonably have avoided or overcome the event or its consequences.
These are not the only legal mechanisms to protect commercial contracts in the face of geopolitical risks and unforeseeable events. To address fluctuations in raw material prices, “price adjustment clauses”, Incoterms, “raw material supply terms”, and “clauses for suspending obligations or extending deadlines” play a critical role in commercial contracts.
These types of provisions both exempt the parties from certain obligations and ensure the sustainability of their commercial relations. Arbitral tribunals and courts are increasingly paying heed to such clauses. This demonstrates the importance of legal review along with commercial foresight in contracts.
In conclusion, recent developments point to the far-reaching effects of geopolitical circumstances on economic and legal structures. Geopolitical risks’ impact on international trade directly influences supply chain management and trade law. Therefore, safeguarding contracts from unforeseen risks is essential to maintaining commercial relationships. In this framework, exporters, investors and service providers across all sectors must review their international contracts to adapt to emerging risks.
Selin Ünverdi, Associate
