As discussed below, in addition to taking steps to manage the human element of the health crisis, businesses should:
- review their contracts to determine what, if any, rights and remedies they have as a result of the delayed performance of contracts due to force majeure;
- timely provide notice of a force majeure event;
- prepare for potential litigation concerning failure-to-supply issues and the application of force majeure clauses, including by taking (and documenting) reasonable steps to mitigate the impact of the novel coronavirus;
- update form force majeure clauses to take into account, to the extent possible, modern risks to contractual performance, including diseases, epidemics or quarantines.
Force Majeure in General:
A force majeure clause may excuse a party's performance of a contract if an unforeseen event outside the party's control prevents the party from performing its contractual obligations. However, a party invoking a force majeure clause faces at least five hurdles.