Canadian businesses asking questions about force majeure in light of COVID-19 – The Lawyer’s Daily

Elliot A. Smith

Mar 27, 2020

Since the World Health Organization (WHO) declared the COVID-19 outbreak to be a global pandemic, more and more Canadian businesses are looking to force majeure clauses and the common law doctrine of frustration to mitigate the impact of the crisis, according to a recent article by Luis Millan in The Lawyer’s Daily. As Luis Millan explains, force majeure clauses in contracts release one of the parties from fulfilling its obligations in the event of circumstances beyond its control which makes performance “inadvisable, commercially impractical, illegal or impossible.” Examples of triggering events found in force majeure clauses include war, riots and natural disasters. For further information about the current situation, the author reached out to Osler’s Elliot Smith, a partner specializing in construction law who is also a professional engineer.

“It is typical in a construction contract to have express force majeure language so you’re not left in a situation where you’re trying to rely on a court to make an interpretation around whether or not the common law test is made out,” Elliot explains.

“We’re seeing a lot of pre-force majeure notices,” he elaborates. “Contractors are telling owners that given the current COVID-19 situation, we are assessing what the project impacts are and we will follow up in due course. So they’re not necessarily claiming any contractual relief at this point but are putting owners on notice that it may be coming in the future.”

Learn more about the application of force majeure clauses — as well as the possibility of invoking the common law doctrine of frustration — by reading Luis Millan’s full article “Canadian businesses asking questions about force majeure in light of COVID-19” in the March 19, 2020, edition of The Lawyer’s Daily.