Businesses around the world are being disrupted by the coronavirus outbreak due to supply disruptions, workforce constraints from sickness and self-isolation measures as well lockdowns and the restriction on the movement of people imposed by governments. Where possible, businesses are asking their employees to work from home. However, in light of these difficulties businesses and indeed individuals may find it impossible to meet certain contractual obligations and deadlines.
So the law……..
Under English law, once you have contracted to do something, there are very few ways in which you can avoid those obligations without having to compensate the other party for failure to perform the contract. One possible way may be to invoke the “force majeure” clause in contracts. This type of clause, commonly found in commercial agreements, usually states that one or both parties will not be liable for any delay in performance or non-performance of its obligations under the contract upon the occurrence of certain events, such as accidents, acts of war or terrorism, civil or military disturbances, natural catastrophes or acts of God. 
What does the contract say…..or not say….?
Most contracts will provide for some form of relief for exceptional events outside the parties’ control such as “force majeure” or as constituting a type of “exceptional event”.
The scope of the force majeure relief will depend entirely on the terms of the contract. The starting point is to check the definitions in the contract to see if it contains an exhaustive list of events, in which case you would need to consider the terms used to see if they would cover coronavirus. If there is a non-exhaustive list, then there will likely be greater room for arguing that coronavirus is covered in principle. While it is unlikely that contracts will specifically list “coronavirus” in the force majeure definition, there may be other terms that are applicable, such as “epidemic” or “pandemic”.
Is the contract frustrated…..?
If there is no force majeure clause it may be possible for the defaulting party to argue that the contract has been frustrated. In order to claim frustration of a contract, a party has to demonstrate that the contract is incapable of being performed due to an unforeseen event and that the event in question resulted in the contractual obligations being radically different from those originally contemplated. Proving a contract has been frustrated is very difficult but if successful then the contract will be automatically terminated at the point of frustration with the parties being discharged from future obligations.
And finally….. its “business as usual” at Blacks……………..
If you are involved in any contractual dispute or if you require assistance with the preparation or interpretation of a contract then Blacks Solicitors can assist. Please contact Luke Patel on 0113 227 9316 or 07971 847132 or by email at “LPatel@LawBlacks.com”
