COVID-19, Force Majeure and Breach of Contracts

Abstract

The outbreak and spread of the COVID-19 pandemic have had a global impact on every facet of life. Contracting parties are now focusing on how to mitigate its impact on their contractual agreements. Many of such contracts could no longer be executed due to the lockdown of economic activities. Governments are developing measures to curb the further spread of the unprecedented global pandemic, which has made contracts total uneforceabele or difficult to comply. Though there are many ways of alleviating potential liabilities that may arise from a breach of contract; it is trite that any departure from agreed terms of a contract will lead to a claim in damages. If and when this type of outbreak occurs subsequently, what can the contracting parties do to avoid a breach? Is COVID-19 a force majeure event? Legally, can force majeure clauses be drafted in such a way that both present and similar pandemics in future are captured? This paper is written to answer these and related questions, and provide a guide to parties in contractual relationships affected by the pandemic regarding what to do now and in case of future epidemics of this magnitude.