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Force majeure clauses: Contractual risk allocation and the COVID-19 pandemic

Author(s): Mark Gelowitz, Geoffrey Hunnisett, Elie Farkas

Dec 8, 2020

Owing to the COVID-19 pandemic, the force majeure clause has entered what will hopefully be its only heyday. Force majeure clauses typically operate as risk-allocation provisions that excuse performance where a party becomes unable to perform its contractual obligations due to the occurrence of an event beyond its control.

Virtually ubiquitous boilerplate in the modern commercial agreement, force majeure clauses have been often paid little, if any, attention by contracting parties (notwithstanding that a poorly drafted force majeure clause can have severe consequences in the event that a party finds itself unable to perform due to an event beyond its control). However, the COVID-19 pandemic is raising issues related to force majeure like no event before it. In this article, we provide an overview of certain legal principles related to force majeure and consider some issues engaged when interpreting a force majeure clause, including in the context of the COVID-19 pandemic...