GEPLAW FOCUS: COVID-19, FORCE MAJEURE AND FRUSTRATION OF CONTRACT: APPLICABILITY AND LESSONS FOR THE FUTURE

GEPLAW FOCUS: COVID-19, FORCE MAJEURE AND FRUSTRATION OF CONTRACT: APPLICABILITY AND LESSONS FOR THE FUTURE


 

The novel Coronavirus Disease 2019 (Covid-19) is fast spreading around the world. The World Health Organization (WHO) declared it a pandemic on March 11, 2020. Presently, Covid-19 has affected 185 countries.

The impact of the Covid-19 pandemic is greatly felt in the business sphere, especially with the performance of contracts entered prior to the pandemic. Many parties to commercial agreements find themselves in precarious positions where the performances of their obligations are now either impractical or impossible to fulfil. The law generally respects the sanctity of contracts, with limited exceptions. One of such exceptions is the occurrence of a force majeure and frustration of contract, which shall be analysed in light of the Covid-19 pandemic.

DEFINITION OF FORCE MAJEURE
A force majeure event is an occurrence outside the reasonable control of a party to a contract preventing that party from performing its obligations under the contract. Typically, they include war, strike, riot, insurgency, epidemic or an event described as an Acts of God. Acts…continue reading