Does the COVID-19 Public Health Crisis Excuse Contract Performance?

Many contracts, from commercial leases, to supply agreements, to service arrangements, may include a ‘force majeure’ clause. Prior to COVID-19, this clause may have been overlooked by parties who saw it as highly unlikely to ever come into play. However, recent events have seen West Virginia businesses dusting off contracts and carefully reviewing force majeure provisions.

What qualifies as a ‘force majeure’ event is different in every instance and depends on both the facts on the ground and the contractual language. Typically, however, these clauses are intended to help to allocate contract risk in the event that unforeseen circumstances that are beyond the control of the parties make it impossible for one party to perform. ‘Acts of God,’ riots, rebellions, and other unlikely circumstances are often included in agreements in non-exclusive lists of force majeure events.

COVID-19 shelter-in-place restrictions and individual industry operating regulations are increasingly transforming the economy into a highly localized and constantly shifting patchwork of regulatory restrictions across the United States (a trend likely to continue as clusters of infections continue to appear (or re-appear)). Governmental orders and regulatory restrictions may not be the only disruptions to pre-COVID-19 operational patterns. Health related workforce disruptions, strikes and work stoppages, travel and shipping restrictions, regulatory adaptations, and other difficult circumstances being faced by businesses across the country may play into a force majeure analysis.

As business begins to resume, we recommend a review of critical agreements to consider whether the public health crisis may excuse performance in some instances. Lewis Glasser has represented clients through COVID-19 related force majeure claims and we would happy to assist you in a review of your agreements or if a contractual counterparty asserts that COVID-19 constitutes a force majeure event. Please reach out to one of our professionals any time.

Matthew R. Bowles  

Member  

Lewis Glasser PLLC   

(O) 304.345.2000 (Ext. 1039) / (D) 304.414.9001                       

lewisglasser.com / mbowles@lewisglasser.com                        


James M. Becker  

Associate 

Lewis Glasser PLLC   

(O) 304.345.2000 (Ext. 1014) / (D) 304.414.9014                       

lewisglasser.com / mbowles@lewisglasser.com                        


Lewis Glasser PLLC

304-345-2000 / lewisglasser.com/covid-19-resources

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This e-update is advertising material intended to provide addressees with informational updates and perspectives regarding matters of interest in connection with the COVID 19 pandemic. This e-update does not constitute legal advice, the provision of legal counseling or any other professional service, nor does it constitute a legal opinion regarding any specific facts. No attorney-client relationship is created by this e-update and this e-update does not constitute an offer to provide legal services.

The nature of the current crisis has resulted in an extraordinary pace of new developments. Readers are encouraged to follow up regularly on new developments in areas of interest and to consult with legal counsel at Lewis Glasser PLLC for guidance and to resolve specific matters or questions.

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