Contracts during COVID-19

Many people are struggling to fulfill their duties under a contract because of the effects of COVID-19.  Additionally, many people are dependent upon the performance of a contract and are concerned that the other party may default.  As a result, issues are starting to arise regarding enforcing existing contracts.

If you are in either of these situations, it is important to read your contract to determine what it says will happen in the event of an issue with performance of the contract.  Many contracts include a force majeure clause.  If your contract has one, review the list of triggering events to determine whether a pandemic may be covered.  Some contracts, such as those in the medical field, may include this kind of specific language.  However, in more traditional commercial contracts, it is rare.  Still, even if the word “pandemic” is not in the list, there may be language that applies, such as a provision about what happens if the government makes an order that impacts the performance of the contract.  Additionally, a catch-all type provision may be interpreted as covering a situation like a pandemic.

Whether or not a force majeure clause can be invoked because of COVID-19 varies based on the specific facts of the situation and the way the language in the contract is drafted.  Also, the contract may include other requirements to invoke a force majeure clause, such as providing proper notice to the other party.

If you are searching for a way to be released from a contract or if you need to determine how to enforce a contract, please contact us so we can review the specifics of your situation and propose a plan to meet your goals.

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