Introduction
Recent public health orders and government directions introduced
to limit the spread of COVID-19 (coronavirus) in Australia may make
the performance of some contractual obligations illegal, at least
temporarily. This article considers circumstances in which these
changes in law may either result in the temporary suspension of a
party's obligations under a contract (due to illegality), or
have the effect of discharging the contract for frustration.
We have previously written about
the effect of the COVID-19 pandemic on contractual
arrangements, with a particular focus on force majeure clauses.
Since then, State and Territory governments have introduced
restrictions on the public to enforce lockdowns using public health
orders such as those now in force in
Victoria and
New South Wales. We discuss below how these changes in the law
may affect your business's contractual obligations,
irrespective of whether the contracts contain a force majeure
clause.
