'An Act of God,' Force Majeure Legal Clause May Be Invoked Because Of Coronavirus
According to a Lexington attorney specializing in force majeure, the coronavirus pandemic may qualify. The clause, found in many legal contracts, allows business and individuals to break their contractual obligations due to an unforeseen event, like an act of God.
Attorney Steve Amato said the courts will ultimately decide if the coronavirus can be cited in cases of force majeure. “We've looked at this and I do believe that the illness itself will be a sufficient event under certain contracts in certain circumstances. Probably more commonly, however, the event that gives rise to the ability to avoid an obligation will be the government restrictions that flow from the illness,” said Amato.
Amato added that there are options for businesses without a force majeure clause in their contracts. He points to the concept of impracticability, where honoring the contract is something short of unfeasible.
“Then there is the concept of impossibility, which is when circumstances are such that it is literally impossible to perform, literally impossible to produce and deliver these goods, impossible to pay the amounts that are owed,” said Amato.
Amato predicted that the current circumstances might not give rise to many impossibility claims, but impracticability claims are likely.
He added that the best course is for each party in the contract to work out a temporary solution among themselves before turning to force majeure claims.
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