The Concept of Force Majeure in Pandemic

Posted: 29 Jun 2020

Date Written: June 28, 2020

Abstract

Coronavirus disease, more commonly known as Covid-19, which first occurred in China around December 2019, was declared a pandemic by the World Health Organization on 11 March 2020. In particular, two months after its outbreak, economies around the world have already begun to sustain operations and fulfill existing contractual obligations in all industries, such as the automotive industry, real estate, aviation, etc. Lack of working population, lack of equipment, and lack of confidence have already prompted some businesses to file a lawsuit for failure to comply with contractual obligations. Contracts and contractual obligations are therefore being reviewed to assess these impacts. The term that today has assumed relevance in the contractual context for companies and is most frequently heard is "force majeure" and how this term will be interpreted in the context of the COVID-19 contract is what this article will be dealing with the most. The concept of force majeure must be examined to determine the meaning of this situation and its evolution in the current economic system. This Legal Article discusses the effects of the pandemic on business performance, and some contract options should be considered for companies to move forward. This report follows up to the Force Majeure in the Coronavirus Wake (COVID-19) warning, taking into account recent developments and their effect on the parties' right to invoke force majeure, and providing alternate common law reasons for non-performance where contracts are ambiguous on the subject.

Keywords: Pandemic, COVID 19, Force Majeure, Outbreak, and impact on the economy.

Suggested Citation

Chintala, Akshaya, The Concept of Force Majeure in Pandemic (June 28, 2020). Available at SSRN: https://ssrn.com/abstract=3637195

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