The three clauses a company's purchasing or sales department negotiates hardest, the liability cap, the force majeure clause and the hardship clause, are the three clauses most often copied from a foreign template into a contract governed by Montenegrin law. I read them every week in supply, construction, hotel operating and software contracts, and the pattern is the same: a cap drafted for a legal system where caps are tested only against unconscionability, a force majeure definition written for a code that has one, and a hardship clause that either duplicates the statute or silently waives it. Montenegrin law has its own answers. The Law on Obligations makes the debtor liable for non-performance and delay unless it proves an excusing event, forbids the advance exclusion of liability for intent and gross negligence, upholds a cap that is not manifestly disproportionate to the loss, limits recoverable loss to what was foreseeable at contracting, releases both parties where performance becomes impossible without fault, and lets a court amend or terminate a contract for unforeseeable changed circumstances unless that right was waived in advance. This page sets out those rules from the statute and turns them into drafting for each side.
Sources, checked 11 September 2026. Law on Obligations (Official Gazette of Montenegro 47/08, 4/11, 22/17, 123/24 and 94/26), Articles 117 to 133, 269 to 276, 277 to 283, 332 and 383.
The default position: liable unless excused
Article 269 states the rule the clauses modify. The debtor must perform conscientiously in all respects as the obligation reads; where it fails to perform or is late, the creditor may claim the loss suffered; a debtor that was given an additional period is still liable for the delay; and a debtor in default answers even for a partial or total impossibility it did not cause, unless it proves the object would have perished by accident even with timely performance. Article 270 gives the only statutory escape: the debtor is released from liability if it proves that it could not perform, or was late, because of circumstances arising after conclusion of the contract that it could not prevent, remove or avoid. Article 332(3) applies the same idea one step earlier, providing that a debtor does not fall into default if it proves that the delay was due to force majeure or other circumstances for which it is not responsible. The code contains no general definition of force majeure; the contractual standard is the three verbs of Article 270, and a force majeure clause either restates them, widens them or narrows them.
What can be excluded, and what cannot
Article 272 sets four rules that every cap and exclusion in a Montenegrin contract must pass. The debtor's liability for intent or gross negligence cannot be excluded by contract in advance. An exclusion of liability for ordinary negligence is valid in principle, but the court may annul it at the request of the interested party if it resulted from the debtor's monopoly position or generally from an unequal relationship between the parties. A clause fixing the maximum amount of compensation is valid if the amount is not in manifest disproportion to the loss and the law does not provide otherwise for the case. And where the amount is capped, the creditor still has full compensation if the failure to perform was caused intentionally or by gross negligence. Article 271 covers the opposite movement: the parties may extend the debtor's liability to events it would not otherwise answer for, but performance of such a clause cannot be demanded where that would be contrary to good faith. A "sole and exclusive remedy" clause, a cap at the contract price, an exclusion of lost profit and a penalty expressed as the only liability for delay are all read through Article 272, and the penalty rules add their own layer, set out on the penalty clauses page.
| Clause | Montenegrin rule | Article |
|---|---|---|
| Exclusion of liability for intent or gross negligence | Void if agreed in advance | 272(1) |
| Exclusion for ordinary negligence | Valid, but annullable where it came from monopoly or unequal bargaining | 272(2) |
| Cap on the amount of compensation | Valid unless manifestly disproportionate to the loss | 272(3) |
| Cap where the breach was intentional or grossly negligent | Full compensation notwithstanding the cap | 272(4) |
| Extension of liability to excused events | Valid, unenforceable where contrary to good faith | 271 |
| Exclusion of lost profit | Tested as a cap under 272(3); lost profit is otherwise recoverable if foreseeable | 273(1) |
| Force majeure definition | No statutory definition; excuse where the debtor could not prevent, remove or avoid the event | 270, 332(3) |
| Waiver of the changed circumstances remedy | Valid for specified circumstances, within good faith | 131 |
How much is owed when there is no cap
Article 273 measures the claim the cap is meant to limit. The creditor recovers ordinary loss and lost profit that the debtor, at the time of contracting, had to foresee as possible consequences of breach, having regard to the facts then known or knowable to it. In the case of fraud, intentional non-performance or gross negligence, the creditor recovers the whole loss caused by the breach, whether or not the debtor knew of the special circumstances that produced it. A gain the creditor made from the breach is taken into account in reasonable measure, and the party relying on the breach must take all reasonable steps to reduce the loss or face a reduction of the compensation. Article 274 reduces compensation proportionally where the creditor, or a person it answers for, contributed to the loss or to its size; Article 275 makes a party liable for loss caused by failing to inform the other in time of facts affecting their relationship; and Article 276 sends everything the section does not regulate to the rules on non-contractual damage. The practical consequence for a supplier is that the foreseeability rule of Article 273(1) is already a limitation of liability, and a contractual cap should be set with that baseline in mind, because a cap far below foreseeable loss is what Article 272(3) calls manifestly disproportionate.
Impossibility and the events nobody caused
Articles 132 and 133 decide what happens when performance becomes impossible. Where the event is one for which neither party is responsible, the other party's obligation is extinguished too, and what it has already performed is returned under the rules on unjust enrichment; where the impossibility is partial, the other party may terminate if partial performance does not meet its needs, and otherwise the contract stands with a proportional reduction of its counter-performance. Where the impossibility was caused by the creditor, the debtor's obligation is extinguished but it keeps its claim, reduced by the benefit it drew from its release. Where it was caused by the party that had to perform, the other party may choose between damages for non-performance and withdrawal with damages. A force majeure clause sits on top of these rules: it defines which events count, requires notice, suspends performance for a period, and gives a termination right after that period. Because Article 270 is strict, a clause that lists strikes, supplier failure or price movements as excusing events is an extension of the debtor's protection that Article 271 would not otherwise give, and a clause that excludes those events narrows it; either way the clause, not the statute, decides, subject to the limits of Article 272 and of good faith.
Changed circumstances under Articles 128 to 131
Where performance has not become impossible but has become excessively difficult, Article 128 lets the burdened party ask the court to amend or terminate the contract, if circumstances arose after conclusion that could not have been foreseen and that make performance excessively difficult or would cause it an excessive loss. The remedy is lost where the party should have taken those circumstances into account at contracting or could have avoided or overcome them, and it cannot be based on circumstances that arose after the expiry of the deadline for its own performance. The contract is not terminated if the other party offers or agrees to a fair amendment of its terms, and where the court does terminate, it orders the party that asked for termination to compensate the other for a fair part of its loss. Article 129 requires the party intending to invoke changed circumstances to notify the other as soon as it learned of them, on pain of liability for the loss caused by late notice; Article 130 tells the court to decide on good faith, having regard to the purpose of the contract, the normal risk of contracts of that type, the effect and duration of the extraordinary circumstances and the balanced interests of both parties; and Article 131 lets the parties waive the remedy in advance for specified circumstances, unless the waiver is contrary to good faith. A hardship clause in a Montenegrin contract is therefore either an Article 131 waiver, a renegotiation procedure that runs before anyone goes to court, or both.
Termination for non-performance, briefly
The remedies that a cap and a force majeure clause interact with are in Articles 119 to 127. The creditor of an unperformed obligation may demand performance or terminate by simple declaration, and in any event claim damages; where time is of the essence the contract terminates by operation of law unless the creditor promptly keeps it alive; where it is not, the creditor must give an appropriate additional period, unless the debtor's conduct shows it will not perform anyway or it is obvious before the deadline that it will not; in contracts with successive obligations one default can end all future ones; the terminating party must notify without delay; a contract cannot be terminated for non-performance of an insignificant part; and on termination both parties are released except for damages, with restitution and default interest on money from the day it was received. Article 117 lets a party withhold its own performance until the other performs or is ready to, and Article 118 lets the party that must perform first suspend and demand security where the other's ability to perform has become uncertain.
Drafting for the buyer
Keep the supplier's cap above the loss the buyer can foresee at signature, since a cap the court finds manifestly disproportionate falls under Article 272(3) and the buyer then argues over the figure rather than collecting it. Carve intent and gross negligence out of the cap expressly, because Article 272(1) and (4) do so anyway and an express carve-out avoids the argument. Define force majeure narrowly, exclude events within the supplier's sphere such as subcontractor default and price increases, require notice within a fixed number of days, and give the buyer a termination right after a fixed suspension period. Add an Article 131 waiver for the circumstances the buyer is paying the supplier to bear, such as material and labour costs and exchange rates, and keep a renegotiation clause for the rest. Say expressly whether the penalty for delay is in addition to, or within, the cap. And state that time is of the essence for the deliveries where it is, so that Article 120 does the work without an additional period.
Drafting for the supplier
Cap liability at a defensible figure, typically the contract price or the annual fees, and express the cap as the total liability from all causes including the penalty, which Article 272(3) upholds where the figure is not manifestly disproportionate. Exclude indirect loss and lost profit expressly, since Article 273(1) otherwise allows foreseeable lost profit. Define force majeure widely enough to cover the events the supplier cannot control, remembering that under Article 270 the statutory excuse requires that the event could not be prevented, removed or avoided; a contractual list is what protects the supplier from that standard. Keep the changed circumstances remedy alive, or at least a renegotiation procedure with a termination right, and refuse an Article 131 waiver that covers the supplier's own input costs. And answer every notice of breach in writing, since Articles 129 and 275 both attach liability to silence.
When the clause is tested
A liability dispute in Montenegro turns on four questions: whether the debtor proves an Article 270 excuse, whether the loss was foreseeable under Article 273, whether the cap survives Article 272, and whether the creditor mitigated and did not contribute. The evidence for all four is created during the contract, in notices, correspondence and records of loss, which is why the notice provisions of the contract matter more than its recitals. Quantification is set out on the damages page, the time limits on the limitation periods page, enforcement on the enforcement against a company page, the way a contractor's price and delay risk are actually negotiated on the contractor risk page, and the operator's version of these clauses on the hotel operating agreement page.
Whose side we are on, and how we are paid
The counterparty's lawyer drafted the cap for the counterparty. The sales manager signed the force majeure clause because the deal was closing and the clause looked standard. The project manager did not send the notice because he was negotiating. None of them is paid to tell you, before you sign, that your cap will not hold against gross negligence, that the events you rely on are not excused under Article 270 unless the contract says so, or that the waiver you accepted gave away the one remedy the code offered you when costs moved.
We take no commission or referral fee from contractors, suppliers, agents or counterparties, in any form, on any file. The fee you pay us is our only income from your matter, and it does not depend on whether a claim is paid or a contract is signed. Because our position does not move with the outcome, telling a buyer that its cap is too low to matter, or a supplier that its exclusion is annullable, costs us nothing to say.
One boundary, stated plainly. We are lawyers, not licensed investment advisers and not insurers. We do not decide how much risk a business should carry. What we protect is the Montenegrin legal position: a cap that survives Article 272, a force majeure clause that says what the statute does not, a changed circumstances clause that keeps or waives the remedy on purpose, and notices sent when the code requires them. The legal function these pages belong to is described on the outsourced legal department page.
Before the next contract is signed or the next claim is made
Send us the draft or the contract, the correspondence about the event, the notices sent and received and the evidence of loss on either side. We will tell you what the three clauses are worth under Montenegrin law, what must change before signature, whether an event excuses performance, and what notice preserves the position. Our corporate work in Montenegro is described on the Montenegro lawyer page.
What this page does not settle
Product liability under the 2026 amendment, liability for auxiliaries, warranty for defects in sales and construction contracts, insurance, liability in tort, consumer contracts and the conduct of litigation are separate subjects. The reading of "manifest disproportion" and of the good faith limits is the court's in each case, and this page states the statute, not a forecast.
