Force Majeure Could Mean The End Of Your Business


Force Majeure is defined as – unforeseeable circumstances that prevent someone from fulfilling a contract.

Many contracts have such a clause.

It would typically come into play in the event of a tsunami or earthquake or similar.

But this current COVID-19 Crisis, according to most interpretations, would qualify as a force majeure event.

That means, if you have a contract with another person or company, they may be able to avoid their obligations to you at this time.

If that obligation includes them paying you money for goods &/or services rendered, you could be in trouble.

Further, oftentimes these force majeure clauses will allow either party to cancel the agreement completely if the event last more than a certain period of time – 3 mths, 6 mths or more.

So, best you check your agreements and make yourself aware of the short term and long term impacts on your business if a force majeure is declared.

#forcemajeure #contractual #covid19