Commercial Law

Force Majeure clauses and COVID – 19

March 20, 2020

You have entered into a contract to be performed at a certain time or place and then found that it cannot be performed due to COVID-19 government restrictions. What can be done?

First check to see whether there is a force majeure clause in the contract ( you did make the agreement in writing didn’t you?) and depending on the wording it is a clause in a contract  which may change the obligations of parties to it by permitting premature termination or excusing an affected party from delay in whole or part or possibly permitting more time to perform obligations under it.

If the performance of the contract is affected by a supervening event such as COVID-19 the party seeking to rely on force majeure clause must if challenged satisfy a court that the event was outside of that party’s control  and the effect of the clause actually covers the event relied upon.

Force majeure clauses vary in detail and events covered under them as some clauses will have no reference at all to epidemics or pandemics (as with COVID-19). Either way the party relying on the wording in the clause has the job of satisfying the other party and ultimately a court that COVID -19 amounts to a force majeure and as a result of that circumstance  the contract could not be performed at all or substantially performed eg for reasons of delay or shortage of materials.

If  COVID-19 is declared a valid force majeure it and  if obligations are difficult to perform or are impossible to carry out, it will still be necessary to look very closely at the wording in the contract to see whether the words “epidemic” or pandemic are included before  it can be said there is likely a good enough reason to claim a force majeure circumstance has arisen.

If you or your business are or may be in contract affected by the COVID-19 pandemic Jarmans solicitors can help and advise you on your rights.

Contact Barry Bond on 01795 472291 or b.bond@jarmans-solicitors.co.uk  for some immediate help.