The short answer is: it depends.
Most commercial agreements provide for parties to be excused
from their contractual obligations in the event of serious
unforeseen circumstances. Often referred to as "force
majeure" clauses, they generally discharge a contracting
party when a supervening event, beyond the control of either party,
makes performance impossible. While force majeure clauses differ in
their terms, the common thread between them is the occurrence of
something unexpected and beyond reasonable human foresight and
skill.
When can a Business rely on COVID-19 as a FM?
It depends on the wording of the clause, the nature of the
party's contractual obligation, and COVID-19's actual
impact on that obligation. There are four key factors that
determine whether a party can rely on a FM clause based on
COVID-19:
