Friday, March 20, 2020

International Contract Law: Force Majeure and the Covid-19 Pandemic

One of the legal issues for international businesses is whether contracts are enforceable in a pandemic. If a contract contains a force majeure clause, it probably doesn't specifically include a pandemic as a triggering event. Does the contract need to include pandemics specifically or will the general language of the clause include an unforeseeable and uncontrollable event such as a pandemic? Does force majeure excuse a simple inability to pay if the banking system is still functional (and the only problem is that the buyer has no money)? What exactly will excuse performance under force majeure under the Uniform Commercial Code (UCC) Article 2-615, Article 79 of the U.N. Convention on the International Sale of Goods (CISG), or under another country's civil or commercial code? What notice must be given to invoke force majeure?

The topic is one arising repeatedly this week. It was the focus of the phone conference of the International Contracts Committee of the American Bar Association Section of International Law, and it will be the focus of a CLE program next week at the Chicago Bar Association.

Click here to read the Client Memorandum prepared by Paul Weiss on the topic of Force Majeure under the Caronavirus (Covid-19) Pandemic.

Click here to read Force Majeure and Exemption of Liability in Connection with the COVID-19 Outbreak from the Korean Law Perspective.

Hat tip to William P. Johnson, Chair of the International Contracts Committee of the ABA Section of International Law and Dean of the Saint Louis University School of Law.


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