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ARTICLE · 05 MAY 2020

COVID-19 And Commercial Contracts

The COVID-19 outbreak has taken a devastating toll on global health and the global economy. Many businesses are struggling to satisfy their contractual obligations.

United StatesCoronavirus (COVID-19)

Introduction

The COVID-19 outbreak has taken a devastating toll on global health and the global economy. Many businesses are struggling to satisfy their contractual obligations. In the weeks following government orders of increasing severity in response to the COVID-19 pandemic, reality has set in and many businesses are left wondering how the resulting business downturn might affect the enforcement of their commercial contracts.

Businesses may be able to leverage the legal doctrine of force majeure, or perhaps other non-contract remedies, as a means of suspending their contractual obligations and/or terminating the subject contract. However, as summarized below, these doctrines are narrowly construed and must be analyzed carefully in order to determine their effectiveness for the given facts and circumstances. Finally, in certain very limited instances, companies may be able to make claims under their business interruption insurance policies, subject to their

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