COVID-19 as a Force Majeure in Corporate Transactions

11 Pages Posted: 16 Apr 2020 Last revised: 1 Jun 2021

See all articles by Matthew Jennejohn

Matthew Jennejohn

Brigham Young University - J. Reuben Clark Law School

Julian Nyarko

Stanford Law School

Eric L. Talley

Columbia University - School of Law; European Corporate Governance Institute (ECGI)

Date Written: April 1, 2020


This paper surveys the use of pandemic-related provisions in Material Adverse Effects ("MAE") provisions in a large data set of publicly disclosed M&A transactions spanning the years 2003-2020. We document a trend towards greater use of such provisions, taking off particularly after the H1N1 crisis in 2009, and spiking again in late 2019 and early 2020. These terms are invariably located in the exclusions/carve-outs to the MAE, and they are overwhelmingly accompanied by "disproportionate effects" language that tends to dampen the effect of the carve out. There is little discernible statistical relationship between the inclusion of a pandemic-related carve-out and the inclusion of a reverse termination fee ("RTF") granting optionality to the buyer; but when an RTF is present, its magnitude tends to be smaller in the absence of any pandemic-specific carve-out, suggesting some degree of observational complementarity between these terms.

Keywords: COVID-10, Coronavirus, Force Majeure, Act of God, Material Adverse Effect, Material Adverse Change

JEL Classification: K00, K12

Suggested Citation

Jennejohn, Matthew and Nyarko, Julian and Talley, Eric L., COVID-19 as a Force Majeure in Corporate Transactions (April 1, 2020). Columbia Law and Economics Working Paper No. 625, BYU Law Research Paper No. 21-10, Available at SSRN: or

Matthew Jennejohn

Brigham Young University - J. Reuben Clark Law School ( email )

436 JRCB
Brigham Young University
Provo, UT 84602
United States
9175093028 (Phone)

Julian Nyarko

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305
United States

Eric L. Talley (Contact Author)

Columbia University - School of Law ( email )

435 West 116th Street
New York, NY 10025
United States


European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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