log in
All Articles | Back

Member Articles


COVID-19 Webinar Series: May I Be Excused? Force Majeure Controversies at Home and Abroad Webinar Recording 

Published: April, 2020

Submission: May, 2020

 



COVID-19's impact on contract performance looms large over business and industries across the globe. This presentation will address whether and how COVID-19 operates contractually as a force majeure event in the US and key foreign markets including Canada, Mexico, Asia, Europe and Australia.


Goals of the presentation:


  • Explain how force majeure may present an avenue for non-performance under contract without penalty when unforeseeable circumstances arise
  • Analyze specific examples of contract language that may permit discontinuation or termination of performance
  • Understand the mechanics of making a force majeure declaration and pushing back against an unreasonable or imperfect declaration
  • Review universal gap fillers in the common law (impracticability and frustration of purpose) and their unavailability/availability to contracting parties
  • Canvass key foreign markets including the UK, European, Asian and other locale-specific force majeure variations as the law is emerging and companies get back to business
  • Address force majeure causation and the burden of proof
  • Discuss contract interpretation principles courts commonly apply to resolve competing language debates
  • Explore the practical limits of force majeure including risk management considerations, drafting considerations, the duty to mitigate, and hindrance versus impossibility
  • Demystify the evidence needed to rebuke a force majeure declaration, or to support one successfully

Webinar Recording Below


Key Takeaways

  • Review all contract provisions that may qualify as force majeure clauses, carefully analyze their applicability to both the COVID-19 event or the effects (pandemic vs quarantine order)
  • Document all steps taken to mitigate and activate pre-existing crisis management programs
  • Support your position with data from public sources, peer/trade groups, associations and governmental orders (CDC, NIH, State Health Boards, Executive Orders)
  • Timing is everything and perfection matters when notice is given, the non-performing party’s FM notice could be viewed as an intention never to perform
  • Substantial evidence of hinderance, delay, impossibility, or impracticability must be gathered, a triggering event standing alone is usually inadequate
  • Courts will likely apply an objectively reasonably standard to disputed or ambiguous contract terms
  • Courts tend to rely on traditional contract interpretation principles to evaluate Force Majeure and give meaning to all words in these clauses
  • Mere threat or fear of a triggering event may be viewed with skepticism by a tribunal
  • Be pragmatic and methodical about remedies including liquidated damages and whether the counterparty will have assets to pay a judgment post-litigation after weathering this crisis
  • For foreign jurisdictions, determine if civil or common law system, review applicable regulations or precedent, and review specific government actions taken as a result of Covid-19 to determine if force majeure, frustration of purpose or impossibility of performance impacts a party's contractual obligations.

 



Link to article

 

MEMBER COMMENTS

 

 

WSG Member: Please login to add your comment.

    Disclaimer

WSG's members are independent firms and are not affiliated in the joint practice of professional services. Each member exercises its own individual judgments on all client matters.

HOME | SITE MAP | GLANCE | PRIVACY POLICY | DISCLAIMER |  © World Services Group, 2020