COVID-19 & Force Majeure

This abstract is based on COVID-19, Force Majeure and Frustration: Key legal principles and Industry implication, By Fountain Court Chambers, UK. Since the 2nd World War, the effects of the COVID 19 pandemic has been seen as the most crucial global calamity, challenging every facet of mankind. It has created a devastating effect on the social, economic, political, cultural, and psychological lives of people with a long-lasting impetus on people’s livelihood. Currently, in several companies, their in-house counsels are busy extracting databases on force majeure clauses of the contract. For a long, Force majeure clauses have not been used frequently because it is rare for an “act of God” or any other factor mentioned ever to come up. But now with COVID-19, many people are trying to understand it, interpret it, and implement it in full force.

Employees have been seen asking common questions to the company about the legality of force majeure being applicable or not as due to lockdowns they faced challenges in either not receiving the raw material or receiving it with exponential delay. Seeing such hardships and delays in the performance of their contracts, can Force Majeure Clauses be applied? With such questions showing up frequently, force majeure and frustration have suddenly taken center place for parties who are either demanding remedies under existing contracts or deciding what protections need to be built into their future contracts.

The havoc that COVID 19 is wreaking has triggered important questions as to causation, especially where multiple cases will arise due to economic disruption. It will necessitate parties to scrutinize force majeure clauses for not only their existing but future contracts too, and will also require to conder the doctrine of frustration.

The article above sets out core legal principles and relevance in the context of COVID-19 and consequent issues faced by industries due to the pandemic.