https://www.paulweiss.com/practices/lit ... c?id=30881
As outlined in the March 3 Memorandum, force majeure clauses excuse a party’s nonperformance under a contract when extraordinary events prevent a party from fulfilling its contractual obligations.[6] The applicability of a force majeure provision is contract-specific, and there is a high bar for invocation of such a clause. Recent events, including the declaration of COVID-19 as a “pandemic” and the implementation of travel, movement, and large-gathering restrictions, have altered the force majeure landscape in a manner that may impact the availability of such provisions to nonperforming parties.
In considering the applicability of force majeure, courts look to whether: (1) the event qualifies as force majeure under the contract; (2) the risk of nonperformance was foreseeable and able to be mitigated; and (3) performance is truly impossible. The court’s inquiry largely focuses on whether the event giving rise to nonperformance is specifically listed as a qualifying force majeure in the clause at issue.[7] Even if a party can surmount this requirement, it cannot invoke force majeure if: (1) it could have foreseen and mitigated the potential nonperformance,[8] and (2) performance is merely impracticable or economically difficult rather than truly impossible[9] (unless the specific jurisdiction or contract at issue specifies a different standard).[10] Recent COVID-19 developments may impact whether the outbreak and/or its effects constitute force majeure.
COVID-19’s classification as a “pandemic” by the WHO will trigger a force majeure clause that expressly accounts for “pandemics.” That said, the declaration of pandemic standing alone—without a reference to pandemics in a force majeure clause—will not automatically constitute a force majeure given the courts’ focus on whether the event is specified within the contractual language. Clauses that are silent on pandemics, epidemics, or other viral outbreaks are likely to be insufficient for a force majeure defense due to COVID-19, unless, of course, courts liberalize the force majeure analysis to account for market realities.[11] If a force majeure clause clearly covers COVID-19 as a qualifying event in light of the WHO’s declaration, parties seeking to invoke the provision will not need to establish the event was unforeseeable, but will still need to show: (1) that they took steps to mitigate the damage, and (2) that performance is truly impossible (or meets any other standard the clause requires).[12]
Κυριάκος ο Χρυσογέννητος, του Οίκου των Μητσοτακιδών, Πρώτος του Ονόματός του, Κύριος των Κρητών και των Πρώτων Ελλήνων, Προστάτης της Ελλάδος, Μπαμπάς της Δρακογενιάς, ο Κούλης του Οίνοπα Πόντου, ο Ατσαλάκωτος, ο Απελευθερωτής από τα Δεσμά των Μνημονίων.
