What Constitutes Force Majeure and Impossibility
When is Force Majeure Really Force Majeure?
The rapid spread of the novel coronavirus, combined with the impact of various government responses, has caused significant disruption to business on a global scale, including commercial travel, supply chains, and other commercial operations and relationships. As a result, some companies have asserted (or threatened) that the outbreak constitutes a force majeure event or gives rise to other legal bases excusing performance.
Business Disruption and Commercial Contracts (Part 2): What is the Actual Cause of the Disruption?
Force majeure and related doctrines may allow a contracting party to suspend or terminate performance when certain unforeseeable events that are beyond the control of the parties occur, such as a global pandemic or government action or prohibition. However, the mere existence of a force majeure clause and qualifying event may not excuse non-performance if that event is not the actual cause of the business disruption.
Expecting the Unexpected: Responding to Force Majeure and COVID-19
The battle against COVID-19 has caused disruptions to industries across the US. Based on the trajectory of the virus' impact, it appears inevitable that COVID-19 will continue to affect businesses - both large and small - for the coming weeks and months. Many of these businesses are parties to contracts that will become increasingly difficult to perform. By now, prudent business owners have reviewed their contracts with particular attention on each contracts' force majeure clause.
Will Force Majeure be #1?
COVID-19 has had a massive impact on so many aspects of our lives – and contracts are no exception. There is extensive discussion over what terms will change, which provisions become more important, whether the tone and tenor of negotiations themselves will alter, perhaps becoming more collaborative. Scanning the legal press, it would be easy to conclude that Force Majeure may once again be a candidate for top spot – but is that really the case?