COVID-19 – Impact On The Performance Of Contracts

A force majeure clause in a construction contract temporarily excuses a party from performing its obligations under the contract where an unexpected event prevents performance. Force majeure is distinct from the legal doctrine of frustration which has a higher threshold and releases the parties from all future obligations under the contract.

In order for a force majeure clause to apply to the current COVID-19 pandemic, the invoking party must show that:

1. COVID-19 is a force majeure event within the meaning of the particular contract entered into by the parties; and
2. COVID-19 was directly responsible for any delay in the performance of the contract, including the possibility of temporarily preventing any performance from continuing until the impacting event subsides.