Question
The COVID-19 pandemic has created numerous impediments to contractualperformancesuchas supply chain issues, stay-at-home orders, travel restrictions, and the shutdown of non-essential businesses. Does thismean that
The COVID-19 pandemic has created numerous impediments to contractualperformancesuchas supply chain issues, stay-at-home orders, travel restrictions, and the shutdown of non-essential businesses. Does thismean that any existing contractual obligations willautomaticallyexcusedbecause of COVID-19? In the linked SupraJD webinar titled https://www.jdsupra.com/legalnews/five-key-takeaways-from-our-contract-61336/ "Five Key Takeaways From Our Contract Considerations Regarding Force Majeure in the COVID-19 Era", the author explains how a force majeure clause in a contract can excuse a party's performance obligations due to certain events that are outside a party's control. Typical Force Majeure events include natural causes (fire, storms, floods), governmental or societal actions (war, invasion, civil unrest, labor strikes), infrastructure failures (transportation, energy), etc. but usually never mention epidemics, pandemics and quarantines. Below is an example of a post-COVOD 19 force majure clause that does havethese new concepts included:
[Section x] FORCE MAJEURE. Neither Party will be liable for any failure or delay in performing an obligation under this Agreement that is due to any of the following causes, to the extent beyond its reasonable control: acts of God, accident, riots, war, terrorist act, epidemic, pandemic, quarantine, civil commotion, breakdown of communication facilities, breakdown of web host, breakdown of internet service provider, natural catastrophes, governmental acts or omissions, changes in laws or regulations, national strikes, fire, explosion, generalized lack of availability of raw materials or energy. Source:https://www.bloomberglaw.com/product/health/document/X3NNK6S4000000 https://www.bloomberglaw.com/product/health/document/X3NNK6S4000000
After reading the webinar summary discussed above, please post a recent news article about a business dispute relating to the topic of COVID-19 and how a force majure clause might be used to allow a business or other entity to be released from a contractual obligation due to the pandemic.
Make sure to:
- Explain the underlying contract between the parties and why performance was not possible,
- Whether the force majeure clause seems like it would help the situation or not
- What other contract defenses does the webinar(see link above)suggest could also be used to excuse a contractualobligation if theforce majureclause doesn'twork
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