Properly prepared — contract law in the new security landscape part 3

In the first two instalments of the series, we looked at how preparedness legislation can affect contractual relationships and what possibilities exist to protect oneself in contracts. Central to those scenarios is that the state intervenes with coercion, either against someone's assets (requisition) or against various supplies (rationing). We now turn our attention to the alternative: what happens when a company contracts for preparedness in advance, instead of waiting for coercion?

Preparedness agreements

A preparedness agreement can vary in form and scope. The purpose of such agreements, however, is to strengthen or maintain activities of importance to societal defence or total defence in the event of crisis or war. A preparedness agreement differs from an ordinary commercial agreement in that it is aimed at continuity and endurance under extraordinary circumstances. Although there is considerable variation, the vast majority of preparedness agreements are procured contracts or framework agreements.

Within this broad category there is a more specific and strategic variant, the supply preparedness agreement (the "F-agreement"). Three important features distinguish an F-agreement from preparedness agreements in general:

1. F-agreements are intended to be a purely state tool, meant to be used exclusively at national level, not by regions or municipalities. The reason is that it requires a clear national prioritisation and coordination that an individual region or municipality cannot achieve.

2. An F-agreement is intended to secure the production capability or capacity itself, rather than a specific end product. It is to be used restrictively, and for capability that is prioritised for national security and that cannot be safeguarded through ordinary market mechanisms or procurement.

3. F-agreements presuppose a more systematic needs analysis than preparedness agreements in general. Since F-agreements are intended to secure a nationally prioritised capability, individual companies will almost without exception be the contracting party vis-à-vis a particular public authority – not a trade association or equivalent collective body. This requires the authority first to have identified exactly which company's capability is critical to the supply need in question.

All F-agreements are thus preparedness agreements, but only a small and nationally prioritised subset of preparedness agreements can be characterised as F-agreements.

Both F-agreements and preparedness agreements in general are constantly topical in these times, but the F-agreement has gained renewed relevance this year through the Inquiry on the Business Sector's Supply Preparedness (“Utredningen om näringslivets försörjningsberedskap”, SOU 2025:68). In its final report, the Inquiry found that neither the procurement rules nor coercive legislation such as the Requisitioning Act (förfogandelagen) are designed to secure the long-term, prepared capacity that total defence requires. The Inquiry therefore proposed a special system for F-agreements. Under the 2026 appropriation directions, the Swedish Civil Defence and Resilience Agency (MCF) has been instructed to develop methodological support for entering into F-agreements and to begin work on a register of F-agreements.

F-agreements fill a gap

The Inquiry is clear that F-agreements are intended to fill a third, independent gap, alongside both procurement and requisitioning – even though the Requisitioning Act is wholly central legislation in this context, it has its limitations.

The list in Section 5 of the Requisitioning Act of what can be requisitioned is exhaustive and tied to specific resources: real property, other property, and usufructuary rights. Furthermore, owners of facilities, warehouses and means of transport may be ordered to provide storage and transport. Certain persons may also be ordered to perform temporary duties for the armed forces. Requisitioning therefore presupposes that a concrete resource already exists – through requisitioning the state can take a machine into use, but requisitioning cannot compel cooperation to build up a new production line.

A precondition for requisitioning is also that the need for the property etc. is unavoidable and cannot be met in any other way without inconvenience. Requisitioning is therefore reactive, not proactive. As a result, requisitioning is not well suited to the long-term build-up of capacity in peacetime.

The right of requisition is also of limited value if the property or utility in question is no longer available. If requisitioning is ordered too late, the resource may already have been consumed or otherwise be unavailable.

Cooperation must also meet the need to quickly prioritise or direct flows of goods in a crisis or war. Neither the Requisitioning Act nor, for example, the Rationing Act is designed to handle that situation. Requisitioning therefore becomes a blunt and late tool: it can only take into use what already exists and is available at that particular time. F-agreements, by contrast, are intended to be built up in advance, so as to ensure that the capacity actually exists before the question of an urgent appropriation even arises.

Not just voluntary

There is no statutory obligation to enter into an F-agreement, nor has the Inquiry proposed one. Entering into an F-agreement is therefore voluntary. The incentive for voluntariness is, however, based on a veiled threat of coercion: by entering into the F-agreement, the company shields itself from a possible requisitioning order in the respects covered by the F-agreement.

Contract and coercion do not therefore exclude one another; rather, they are intended to operate together. The Inquiry emphasises that an order against a company that already has a functioning F-agreement in the same area would be disproportionate, and therefore assesses that no such order should be able to be issued for as long as the agreement remains in force. The Inquiry also refers to the Norwegian experience: that the mere existence of a possibility of coercive measures has, in Norway, proven to facilitate rather than hinder the emergence of voluntary agreements. For the individual company, the F-agreement thus becomes a way of shaping its own commitments through negotiation, rather than risking having the terms decided for it.

Reverse force majeure

In commercial agreements, force majeure is a ground for exemption: when war or governmental intervention occurs, the supplier may be relieved of liability. For an F-agreement, the logic is the opposite, since the same circumstances constitute the starting point for the delivery obligation to arise.

Exactly which circumstances should trigger the delivery obligation remains to be determined. Some proposals that have been put forward are that the triggering event be linked to the formal security situation of heightened preparedness, or that a specific governmental decision on activation be made.

Collision with existing agreements

If the F-agreement is activated, the state becomes a priority customer. Should such prioritisation mean that the company cannot deliver or perform towards its other business partners, the company risks breaching its contracts with those partners.

The collision does not in itself differ from a situation where the company's production is forcibly taken into use by the state. In that situation, a force majeure clause or other variation clause might have shielded the company. The difference, however, lies in the fact that the company has voluntarily entered into the F-agreement, either before the other agreements or during their term. It is not a given that the F-agreement constitutes a ground for exemption; on the contrary, there are strong reasons to assume that it would not.

Against this backdrop, one should consider reviewing existing and future commercial agreements against a possible F-agreement commitment, both for the situation where the company itself has entered into an F-agreement and the one where a subcontractor may have done so. Does the agreement contain an express prioritisation clause permitting redirection to the state without this constituting a breach of contract? If the subcontractor has an F-agreement, is the subcontractor exempt from liability, and is the supplier further down the chain exempt from liability towards its own customer?

A further aspect is that such prioritisation may conflict with the board's own responsibility under the Swedish Companies Act. A board that allows the company to deprioritise ongoing commercial commitments in favour of the state risks causing breaches of contract with the company's other contracting parties, which raises the question of how this relates to the board's duty of care. There is thus a mirror image here of the shield the F-agreement provides against the state's own coercion: the agreement protects the company against an order, but at the same time creates a new risk in relation to the company's other contracting parties. Neither the legislature nor the contracting party resolves that risk for the company.

No F-agreements have yet been formally concluded. Responsibility for that balancing exercise therefore rests with the individual contracting parties. However, the Confederation of Swedish Enterprise (Svenskt Näringsliv), for example, has called for a coordinated order of priority between civil and military defence, in order to prevent companies from being faced with conflicting demands where civil F-agreements and military claims for requisition and appropriation stand in direct conflict during heightened preparedness.

The domino effect is the same

The same pattern recurs regardless of the route taken: when a resource is taken into use – through coercion or through contract – it is the direct counterparty to the state that receives compensation. The party one step further down the chain, such as a subcontractor or commercial customer, has neither a right to compensation from the state nor necessarily any protection in its own contract. The domino effect arises because each link in the contractual chain is designed for a normal commercial reality, not for one of the parties suddenly prioritising the state's needs over the ongoing delivery.

Sensitive confidentiality issues

An F-agreement typically contains two kinds of sensitive information: on the one hand, information about the company's production and delivery conditions that should not reach competitors, and on the other, information about the country's supply capability that should not reach foreign powers. The Inquiry therefore proposes a special confidentiality provision: a person who has become aware of an individual's business or operating conditions, or of conditions of importance to supply or to Sweden's security, may not wrongfully disclose or exploit this. For the individual company, the confidentiality issue is not merely a formality – without credible confidentiality protection, companies risk refraining from entering into F-agreements at all, since the business-critical information might otherwise risk being handled by several authorities without a clear allocation of responsibility for who actually has access to it.

Three things that can be done now

1. Map your exposure to requisitioning, to future orders, and to the possibility that your own supplier may have an F-agreement that competes with your supply.

2. Expressly regulate the domino effect of the contractual chain. This may include liquidated damages, termination rights, and who bears the difference between state compensation and actual commercial loss, regardless of whether the triggering event is coercion or a voluntary F-agreement.

3. If you are considering an F-agreement, read your variation clauses twice: once as a ground for exemption under your normal agreements, and once to assess whether, in reverse, it can serve as an objectively ascertainable triggering event. Then regulate compensation, insurance and confidentiality as three separate and deliberate issues, not as after-the-fact constructions.