Covid-19

a “FORCE MAJEURE” event?

The situation with the novel coronavirus Covid 19 continues to be rapidly developing. One immediate impact occurs when businesses or individuals are unable to fulfill existing contractual obligations due to the virus. For example, the unavailability of travel, staffing, or supply, or an intervening governmental order or restriction may make it impractical or impossible for a business to fulfill an obligation that seemed perfectly reasonable a week or two ago.

“Force majeure” is a legal defense that is sometimes available to excuse a party from its inability to perform under a contract.  Generally speaking, force majeure applies if:

  • A party cannot perform its obligations under the contract; and
  • The reason that the party cannot perform its contractual obligations is because of an event that is beyond that party’s reasonable control; and
  • The affected party has taken all reasonable steps to seek to avoid or mitigate the event or its consequences.

If the contract does not have a “force majeure” clause, or if its strict requirements cannot be met, there may also be common law doctrines that could apply.  These may excuse or suspend contractual performance that is made impossible or impracticable because of an unexpected intervening event.

Because every contract and situation is different, you should seek legal advice relating to your particular situation—whether you are seeking to be excused from your own obligations or seeking to enforce a contract against another party. An attorney can review the language of your contract and evaluate the likelihood that any of these doctrines would apply to the facts of your specific situation.