Can ‘force majeure’ save your company from the coronavirus?

The provision is a legal term known as force majeure. Taken from French civil law, force majeure is “a contract provision that excuses a party’s performance of its obligations under a contract when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible,” according to a recent coronavirus and force majeure story in The National Law Review.

Force majeure has been invoked in the past by companies seeking to explain contractual failures stemming from the Sept. 11 terrorist attacks, Hurricane Sandy, SARS, and Ebola. But the international response to the coronavirus—quarantines, shutdowns, and travel bans—has upended business as usual around the world in an unprecedented way, said attorney Gregory Bombard, a partner at the law firm Duane Morris.

Companies seeking to escape liability for failing to deliver the terms of a contract are scrambling for the legal cover to do so, he said. “They want to know: Who bears the risk if we can’t deliver?”

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