How Will COVID-19 Impact My Contracts?

As individuals and businesses seek to comply with the restrictive measures set in place to contain COVID-19, an organization's ability to perform its contractual obligations may become difficult or impossible placing significant burdens on contracting parties.

While this particular pandemic is unique, contract law has long acknowledged that unforeseen circumstances may arise after a contract is executed, but before it is fully performed, that affects a party's ability to perform. These changed circumstances are known as force majeure, or sometimes "Acts of God."

What is Force Majeure?

Absent contract language to the contrary, a party is typically excused from performing a contractual obligation if performance is prevented by an unforeseeable circumstance arising after the contract was executed. A party defaulting on a contractual obligation may claim that its performance was rendered impossible or impractical, or that the essential purpose of the contract