Some major contracts may include requirements for operational contingency plans (BCPs). If you are dealing with a contract that requires a BCP, you should consider whether your BCP should be implemented to mitigate the risk of COVID-19. Lol Force majeure is often treated as a standard clause that cannot be changed. However, since the clause exempts a party from fulfilling its obligations, it must be carefully considered and adapted to the project in question. Since governments in many countries, including the United States, have introduced lockdowns, companies may argue that the execution of their contracts is impractical or impossible. Especially in the United States, a national emergency has been declared. The governors of California, Ohio, Illinois, Washington and Massachusetts have ordered the closure of all bars and restaurants. The mayors of New York and Los Angeles have ordered all bars, restaurants, cafes and theaters to close to slow the spread of the coronavirus. Other cities and counties in the United States, including New Rochelle, New York and the San Francisco Bay Area, are also currently under similar government-imposed lockdowns.
These factors support the possibility that companies will be able to successfully use an impossibility/impractical defense. After 9/11, there was force majeure only if your event had taken place in the Twin Towers or if you were at the Marriott Hotel, located at the foot of the Twin Towers. But Essex House was open. The square was open. The Waldorf was open. Events were therefore not impossible. But the planners said wait, the airlines were shut down. We were all shut down by the government`s action there. Well, you still had trains, cars, and buses that you could use to get to the event. The beauty of 9/11, if there was one good thing about it, it was the reaction and the verification of reality.
The industry said, look, we understand that people are not going to travel. They will not want to leave their home. That emotional reaction was there. And so many precautions were taken at that time. Planners shouldn`t include the term “Covid-19” in their new agreements, should they? Do they have to relate to specific diseases or pandemics? What do you recommend? We know that we will always be faced with the potential of a disease or factor that would make performance impossible or undesirable under the given circumstances. I would never type “Covid-19” because I don`t know if it will always be there or how it will be labeled. It`s like saying in a contract, “I`m going to take over the Emerald Ballroom.” Well, the Emerald Ballroom could suddenly become the Ruby Ballroom. If you are too specific, your organization is sometimes cataloged.
Step 2b. What recourse is there if the force majeure clause is triggered? I do not know how many force majeure clauses we have looked at in the last few months. Unfortunately, for many of them, the cancellation without responsibility will be an itinerary. For some, it will be a slam dunk, but it all depends on what the clause offers, how you interpret it, the effects. This is not a situation where you get a win-win situation. Overall, the court has ruled that the pandemic is considered a case of force majeure in this contract. Can the word pandemic cover everything in the formulation of contracts? Well, the word pandemic may cover it, but again, what does the pandemic do? Does this make performance impossible? Does that make that illegal? Do you have another provision in your contract that says we are exempt from liability because of the pandemic if 45% of my people who would participate cannot do it? It really goes back to how the clauses are worded and the conditions they activate. Every contract, every force majeure, every escape from liability with a certain condition must be checked very carefully. Finally, the force majeure clause determines the extent of the remedy to which a promisor is entitled if its performance is excused by a case of force majeure.
When reviewing a commercial contract, it is important to determine whether the relief provided by the force majeure clause is the relief your customer would expect in the event of such an event. This includes creating a language that actually indicates what will happen at the end of the force majeure event. It is important to ensure that cases of force majeure are events that are not reasonably foreseeable/unlikely. Therefore, if the power supply is necessary for the operation of the installations but is generally intermittent, the parties must ensure that there is backup production or another solution. However, in other circumstances, temporary delivery is unusual/not reasonably foreseeable and should be included as a case of force majeure. When creating or reviewing a contract, think about the type of breach that could cause an unforeseen and catastrophic event for your customers. Next, make sure it`s covered, as your customer may be unlucky if that hypothetical future breach doesn`t fall under the contractual description of a breach that force majeure can excuse. Narrow or clumsy designs can lead to difficult results. In a recent case of tuition reimbursement, a student sued his university, claiming that it breached a contract to provide face-to-face teaching after COVID-19 prompted the school to turn to distance learning.
The force majeure clause stated: “There will be no reimbursement of tuition fees. in the event that the operation of the University is suspended at any time due to a case of force majeure. The university`s request for dismissal was rejected: the clause did not apply because the school`s alleged violation was not to “suspend its activities” but to offer an alternative teaching method. Gibson v. Lynn University, no. 20-cv-81173 (S.D. Fla. November 29, 2020). (The court was concerned that the university had a Fed.
R. Civ. P. 12(b)(6) would have been dismissed if she had simply been shut down instead of “trying to ensure some continuity for her students through distance learning”, and suggested that she could review it with a more complete record). Your particular event (in this situation, the COVID-19 pandemic or related government measures) falls within the list of events contained in the force majeure clause; And it`s important to note that due to the scale of the coronavirus outbreak and government-imposed lockdowns in China, a quasi-state agency called the China Council for the Promotion of International Trade (CCPIT), backed by Beijing`s Ministry of Commerce, has provided Chinese companies with force majeure “certificates.” CcpIT issues force majeure certificates when companies can provide documents proving that they are unable to meet their contractual obligations due to the impact of the coronavirus. [16] Given this fact, invoking a force majeure clause can be successful if a company in China located in a government-imposed territory has a force majeure clause in a contract governed by Chinese law. .
English
Português