Force Majeure

In connection with the development, production, financing and distribution of content, we find ourselves in uncharted territory where most of the foregoing has been impacted by the COVID-19 pandemic, “social distancing” measures and varying degrees of government-enforced quarantines. As a result, the entertainment community is turning to a customary provision found in industry agreements: “Force Majeure”.

What is the principle of force majeure and does it relate to the current, global, COVID-19 pandemic? Force majeure refers to a situation where an unforeseen event, beyond the control of the impacted party, prevents the impacted party from performing its obligations under an agreement. In this memorandum, we will examine: (i) whether COVID-19 is likely to be covered under the scope of a contractual force majeure event, and, if it is covered, how you can invoke force majeure protections in connection with the development, production, financing and exploitation of content; (ii) what your fallback option is if you cannot rely on force majeure protections (either due to the fact that COVID-19 is not covered by the contractual scope of the force majeure definition or because the contract is silent as to force majeure); and (iii) what steps you should take to best protect yourself moving forward.

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Our Reed Smith Coronavirus team includes multidisciplinary lawyers from Asia, EME and the United States who stand ready to advise you on the issues above or others you may face related to COVID-19.

For more information on the legal and business implications of COVID-19, visit the Reed Smith Coronavirus (COVID-19) Resource Center or contact us at COVID-19@reedsmith.com.

Client Alert 2020-176