Many questions are swarming around the Coronavirus and contracts. What are my employee rights? Should I be aware of anything specific in this crisis? What happens if there is a breach of contract due to COVID-19? One thing is for sure, it’s important you understand the legal term Force Majeure and how it may impact your current contracts. 

First, it cannot be stressed enough that each contract is unique. With that being said, without looking specifically at each individual circumstance, it is difficult to determine whether the below legal terms would apply to your specific situation. 

Second, we are swimming in uncharted waters with the COVID-19 pandemic. There are many unknowns such as what further aid the government will offer or restrictions and laws that will be put into place as a result of the current crisis. 

What we can offer for the time being is an explanation of legal terms that will be important when the time comes to renegotiate contracts. Having a basic understanding of legal vocabulary will help to navigate your way through this complicated time.  

What is Force Majeure?

Force Majeure, also known as an “Act of God” is defined by Google dictionary as an “unforeseeable circumstances that prevent someone from fulfilling a contract.” A closer look at your contract will determine whether or not you can use Force Majeure to terminate or alter your contract. 

What if my contract does not include acts of God? 

Don’t worry. There is a common-law defense called impracticality of performance or frustration of purpose. Simply put, these defenses deem that certain circumstances make it impractical to carry out a contract. A good example of this would be if you cannot carry out an event due to the government restriction of prohibiting 10 or more people to gather. 

Knowing whether any of the above legal terms affect your contract can only be determined with a closer look. As things are changing every day, minute, second with the current Coronavirus crisis, contracts will inevitably be impacted and there may be unforeseen consequences to a breach in contract. Therefore, it is imperative to have an appropriate plan of action to protect your interests.

Chuck Kozak is a veteran lawyer with nearly $1 Billion in settlements. Follow Kozak & Associates on Facebook to stay up to date with future blogs, tools, and resources we create to serve you. Need a free case review? Talk to Chuck.