The global coronavirus outbreak is impacting many Canadian
businesses. The pandemic and its containment measures have led to
supply chain interruptions, workforce disruptions and changes in
customer demand, among other issues. As a result, many businesses
are reviewing their rights and obligations under commercial
agreements in case they or their counterparties are unable to
continue with “business as usual”. Options under
consideration may include invoking a force majeure clause or
looking at the law for general doctrines providing relief.
Force Majeure Clauses
The starting point is the contract. Most
commercial contracts include a “force majeure” clause
that defines what constitutes a force majeure event, stipulates the
consequences for the parties in the event of force majeure, and
sets out the procedure for a party seeking to invoke the
clause.
