As a consequence of the COVID-19 emergency, Spanish consumer contract law was amended through Section 36 of Royal Decree-Law 11/2020, of 31 March. Paragraphs 1, 2 and 3 of Section 36 provide the possibility of adjusting consumer sales and services contracts, and if the parties do not reach an agreement within 60 days, the consumer can terminate the contract. We defend in this contribution that Section 36 must never be understood as an alibi for opportunistic termination and, therefore, both the adjustment and termination requests must meet standards of good faith and fair dealing.

The legal issue analysed and answered in this contribution is the scope of Section 36, paragraphs 1 – 3, of Royal Decree-Law 11/2020 in relation to the principle of conservation of contracts. This contribution analyses Section 36 in the light of the good faith principle. Renegotiation, adjustment and even termination are possible but only in good faith.

Section 36, paragraphs 1 – 3, of Royal Decree-Law 11/2020 allows for the termination of consumer sales and services agreements due to the impossibility of compliance caused by the measures adopted to deal with the COVID-19 pandemic under the state of alarm and their extension by the Spanish Government, validated by the Congress of Deputies (the Spanish lower chamber of representatives), and even later, during the de-escalation and the so called “new normal” phases, until the health crisis is over. This regulation is based on the principles of contract preservation and good faith and seeks to guide contract adaptation within the framework of reasonable negotiation between traders and consumers. In our opinion, the objective of reconciling the broad power of termination established by law with the preservation and adaptation of contracts is manifested in the explanation of this regulation discussed in this contribution.

STATE OF ALARM

On 14 March 2020, the Spanish Government declared a state of alarm to handle the health crisis caused by COVID-19 (Royal Decree 463/2020, of 14 March).

Section 116.2 of the Spanish Constitution of 1978 (SC) regulates the state of alarm, which the Government may decree for 15 days, with any extension subject to approval by the Congress of Deputies.