Force Majeure is a clause contained in most commercial contracts. It sets out what should happen if either party were to be prevented from fulfilling their contractual obligations due to unforeseeable circumstances known as a ‘Force Majeure event’.
Exactly what constitutes a Force Majeure event should be defined in the contract. For example, for Covid to be considered a Force Majeure event, it might be that the contract includes in its definition a pandemic or disease, political interference or, more generally, circumstances beyond either party’s control.
If this is the case and Force Majeure is triggered, the affected party is excused from fulfilling their part in the contract until the event has ceased.
If there is no Force Majeure clause in your contract, it might be possible to instead rely on the Doctrine of Frustration. This is limited and far from straightforward but in essence, Frustration applies to an event that makes it impossible or illegal for a contract to be fulfilled due to a serious and unforeseen change in circumstances preventing the parties from continuing with their obligations under the contract. The effect is to terminate the contract and release the parties from their obligations.
It has been said many times over the last seven months, but Covid is unprecedented. The pandemic has caused operational headaches for all businesses with many facing complex and difficult contractual issues.
As a disputes lawyer, I would always advocate communication followed by mediation and, as a last resort, litigation. If you can discuss your situation with the other party and come to an amicable agreement about the way forward, that is always the best solution.
However, if an impasse has been reached, you should speak to a disputes solicitor at the earliest opportunity. We will look at all of the detail and try to reach a resolution on your behalf.
Whether you are unable to fulfil your contractual obligations or you are being affected by another party who is unable to fulfil theirs, get in touch for expert advice. Call 01782 205000 or email firstname.lastname@example.org