These are non-binding measures that may address travel, trade, quarantine, screening, and treatment. WHO can also set global standards of practice during a PHEIC.

See Memphis & Charlestown RR Co. v. Reeves, 77 U.S. 176 (1870). Does COVID-19 qualify as an act of God under the force majeure clause in a contract? A force majeure clause generally provides that if an extraordinary event beyond a company’s control occurs, that company’s performance under the contract may be suspended or excused. difficult time arguing a pandemic like COVID-19 qualifies to trigger the Courts tend to narrowly interpret force majeure clauses. Acts of God are often defined as events that occur due to natural causes which cannot be avoided through the use of caution and preventative measures. © 2020 DLA Piper. If the force majeure clause refers only to Consequently, the clear and unambiguous language of an agreement will not give away to what the parties thought that the agreement meant or intended it to mean. If you would like to cancel or propose changes to an existing contract due to COVID-19, sending a Force Majeure Notice can be a good first step to start the conversation. PK Law’s Corporate and Real Estate Attorneys can help. Example 1:  In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes. which could not have been prevented by any amount of foresight, plans, and care. Therefore, whether the current outbreak would apply to your contract will largely depend on the language of the contract, governing law, and specific circumstances. Proactive efforts to understand your rights, provide timely notices and disclosures, and seek practical solutions to business interruptions will best protect your business in the short term and for the future. party may find success in triggering the clause by pointing to certain

Step 2.

In addition, some clauses include acts by governmental authorities, such as declaring a state of emergency.

Many times have I made and received calls where it’s So the questions is does a viral pandemic fall into the category of a force majeure event? COVID-19; The New Normal and Social Dialogue Within Organizations, GH¢300m expected from local face mask production, Take steps to mitigate possible food crises in Ghana, Covid-19 interventions; laudable initiatives but poorly implemented – Economic Experts, Africa must build and revive its Private Sector through Global connections – Kwame Pianim, Returning to work after Covid-19; here are 6 things every employer should know, Impact of Covid-19: Players in beauty industry close down their businesses, FUEL WATCH w/c 30th March: No fuel shortage, prices remain same despite drop in global markets, The journey of SME Entrepreneurship, a little bit down the line, Facebook to help small businesses with its new digital suite, What the US$1.3 billion loan signed by COCOBOD has to offer, Monetary policy rate maintained at 14.5% for the second time – BOG, Small-scale businesses and start-ups to receive GH¢200 million in 2021, World’s five largest asset management companies hold $22.5trn in assets, more than US GDP, If yes, proceed to Step 2. "Vis major" is a Latin term meaning superior force, describing an irresistible natural occurrence neither caused by nor preventable by humans. In addition, when the language of the contract is plain and unambiguous there is no room for construction, and a court must presume that the parties meant what they expressed.

You can find the full article at bit.ly/3dwCLZm. An act of God is an unforeseeable natural phenomenon. On January 30, the WHO declared the coronavirus outbreak a public health emergency of international concern (PHEIC). Supply chains are being affected and containers are backing up on Chinese docks. Transco plc v Stockport Metropolitan Borough Council, "Insurance: What exactly constitutes an "Act of God"? Likewise, governments also need to take reasonable care to prevent disasters. 285, 301 (2004). present in any notice. Force majeure clauses often list specific items that will qualify as an event of force majeure, such as strikes, wars and riots. earthquakes, and the like. What is the standard of performance? Such excuse shall be continued so long as the condition constituting force majeure continues. Furthermore, given the widespread impact of COVID-19, it is likely that your business partners and competitors are all facing similar issues. But it’s not that simple. In the law of contracts, an act of God may be interpreted as an implied defense under the rule of impossibility or impracticability. If so, special issues may arise.Please refer to this article for more details. cost companies a lot of money. Usually, when business is done under a strong But case law on what does or does not qualify … Starr, Samuel M. Tony; Roy, Alyssa B.; Leonard, Kaitlyn C.; Prober, Clare. For access to free legal documents and legal advice to help you protect your business, visit the Rocket Lawyer Coronavirus Legal Center. If so, the promise is discharged because of unforeseen occurrences, which were unavoidable and would result in insurmountable delay, expense, or other material breach. doctrines of impossibility or commercial impracticability may be available and In the US, Federal Reserve officials suggested the outbreak may cast uncertainty on the US economic outlook.
Example 2: Each Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure (defined below) and the nonperforming Party promptly provides notice of such prevention to the other Party. Specific notice language may also be required. Recently, human activities have been claimed to be the root causes of some events previously considered natural disasters. For example, a bolt of lightning strikes a ship carrying volatile compressed gas, resulting in the expected explosion. of God’ narrowly to refer only to natural disasters such as hurricanes,

In addition, in the second there is a requirement for the party claiming the excuse to put the other party on notice. For purposes of this Agreement, “force majeure” shall include conditions beyond the control of the Parties, including an act of God, acts of terrorism, voluntary or involuntary compliance with any regulation, law or order of any government, war, acts of war (whether war be declared or not), labor strike or lock-out, civil commotion, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe. If the contract was entered into after March 11th, when the World Health Organization declared a global pandemic or when your state issued stay-at-home or shelter-in-place order, COVID-19 may not qualify as a force majeure event since the resulting downturn and/or supply chain interruptions could be deemed foreseeable. party asserting this defence will bear the burden of proving that the event was Are

Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes. For example, California courts explain that the trigger for force majeure is not necessarily the mere presence of an “act of God,” but whether non-performance could have been foreseen and mitigated (or if it was truly impossible) under the circumstances. Insurance policies usually specify which particular acts of God they cover.

circumstances of the specific contract and scenario, and certain jurisdictions Explained by Lord Hobhouse in Transco plc v Stockport Metropolitan Borough Council as describing an event: An act of God is described in Tennant v Earl of Glasgow (1864 2 M (HL) 22) as: "Circumstances which no human foresight can provide against, and of which human prudence is not bound to recognize the possibility, and which when they do occur, therefore, are calamities that do not involve the obligation of paying for the consequences that may result from them.". majeure clause will depend on the specific contract and how the clause was tag a hiccup as a dispute. there requirements for the form of notice? Some jurisdictions have opinions suggesting that Acts of God may be limited to matters solely caused by forces of nature. If the language of the clause does not specifically include or exclude viral pandemics, whether such an occurrence is considered an Act of God is uncertain. In other contracts, such as indemnification, an act of God may be no excuse, and in fact may be the central risk assumed by the promisor—e.g., flood insurance or crop insurance—the only variables being the timing and extent of the damage. The phrase "act of God" is sometimes used to attribute an event to divine intervention.
Generally this means the court will look to the contract language, applying the customary, ordinary and accepted meaning of the language. The specific language used in a force majeure clause controls whether it is applicable and the party relying on the clause bears the burden of proving its application. In the event that the contract does not have a Many force majeure clauses include a list of specific events that are considered unforeseeable and beyond either parties’ control. Some contracts may even specify epidemics or … "[12] Others indicate that God may allow a tragedy to occur.[13][14]. for the. From Kim. In a commercial contract context, acts of God provisions eliminate or limit liability for injuries or other losses resulting from such events, deeming them beyond the control of the parties to the contract. Act of God: Almost all force majeure provisions that contain a specified list of force majeure events include “act of God” on that list.

The region was soon flooded by heavy rains, nearly bursting the reservoir's dam, killing nearly 20 people, destroying 110 bridges (leaving 2), knocking out telephone and telegraph lines, and causing an estimated $3.5 million in damage in total. He is also the Business Advisor for the the, If yes, proceed to Step 4. Careful contract drafting can save a company’s future when an “act of God” or other extraordinary circumstance, like the COVID-19 pandemic, makes performance impossible. Acts of God are often defined as events that occur due to natural causes which cannot be avoided through the use of caution and preventative measures. That said, in reality, you can attempt to renegotiate any contract. If yes, notice may be required by email,

as exhibits to the contract. It is also likely that your customers may themselves be impacted by the outbreak. A judge ruled the flooding in New Orleans caused by Hurricane Katrina (an act of God) as an act of negligence, citing the US Army Corps did not properly maintain flood defenses. form of the notice, to whom it must be sent, and the manner in which it must If you have questions about the specific details of your contract, ask a lawyer.