With the global spread of Coronavirus disease 2019
("COVID-19") causing unprecedented
disruption to individuals and businesses, many will wonder whether
their inability to perform contractual obligations can be excused,
or whether they may be discharged from a contract, either in
reliance on a force majeure provision of a contract or in
circumstances where no such clause exists.
1. To what extent can a force majeure clause
protect a non-performing party from liability given the impact of
COVID-19?
Parties often negotiate a force majeure clause into
their contracts. The standard effect of a force majeure
clause is that the person who is affected by the event gives notice
to the other party that they cannot perform in order to be excused
from performance for a period of time. Such clauses are usually
negotiated in a manner that allocates risk between the parties in
the event of a supervening event, such as war or a natural
disaster, that materially affects a
