Coronavirus and Distress – Do Your Contracts’ Force Majeure Clauses Cover You, Harm You, Mitigate Your Distress, Exacerbate Your Distress, or Warrant a Complete Overhaul?
February 3, 2020
Authored by: Mark Duedall
While no one can reliably predict the outcome, spread, or duration of the coronavirus outbreak, or its tragic human toll, its current effects on Asian and international supply chains are unprecedented. The economic distress may be isolated in the coming weeks (and we pray that is the case, and for the human suffering to abate), or the distress could reverberate over the coming months, or longer.
If your own supply chain depends on Asian imports, or if you are part of a larger supply chain linked to or intertwined with Asia, then could force majeure be implicated? Or could force majeure make things much worse for those depending on a reliable international supply chain? Unfortunately, no contract clause may be less scrutinized during the drafting process than the force majeure provision. Epidemic, pandemic, disease, quarantine, and the like are certainly included in what we may think is force majeure –