COVID-19 & Contracts: What are my options?

COVID-19 has forced us into the unexpected with our personal and professional lives. With an event as extreme as the COVID-19 pandemic, there are concerns about all kinds of agreements, insurance, mortgage, debt obligations, lease, domestic relations, vendor, to name a few. Because nearly every agreement in our lives has been substantially affected, many of us are at a loss what to do.

Understanding your options can help you rediscover an amended agreement to overcome the pandemic challenges of meeting obligations, where contract performance become impracticable, there generally are options. One option could be to rely upon “force majeure” or similar provision where performance is made impracticable because of an intervening event.

COVID-19 in contract legal lingo may be considered a “force majeure” event. You may have such language in your insurance policy or lease agreement. Generally speaking, a “force majeur” is a French term for “superior force,” to represent an event that is neither anticipated, nor controlled. When parties to a contract agree that this event has occurred contractual obligations may be amended.

The jurisdiction where the contract was executed or the governing law provision of the contract was are important factors in evaluating if a force majeure provision is triggered under COVID-19. Why performance becomes impossible, such as prevention by government order, is also key to interpreting the force majeure, or similar clause that addresses discharge of parties’ duties.

The gyst of how your contract may be affected by current day circumstances is likely dependent on state law, so it’s important to have a professional knowledgeable in the applicable state’s contract law to help you interpret a contract, so you can then evaluate options. It makes sense to seek help to navigate these uncertain times when you have a lot riding on a contract. With knowledge of your options you can organize yourself with a plan that will bring you, your family, and maybe even your business the security to move forward with the right mindset. 

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