Covid-19 likely to cause many force majeure terminations of contract, write Katy-Lynne Kay and Antoinette van der Merwe
If any of these organisations are successful at invoking force majeure it will suspend their obligations under their contract for as long as the event persists. Although this seems entirely reasonable in relation to the affected party, this may leave the other party in an untenable situation.
Whether Covid-19 affects existing contracts depends largely on the specific wording of the contract and the parameters of the definition of force majeure. It is unusual to have a closed list of force majeure events and there is often “catch-all” language to include events not specifically listed but that fulfill the broader criteria of the definition.Fortunately for some contracting entities, their force majeure clauses may include specific references to “epidemic” and “pandemic”.
While a party may be excused from its performance under the contract while the force majeure continues, there is usually an obligation to use all commercially reasonable efforts to alleviate and mitigate the cause and effect of the force majeure event and resume performance of its obligations once it is able to do so. However, if the stoppage continues for an extended period, there is sometimes a right to terminate the contract by either party.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Covid-19 regulations cause confusion for sheep shipment - The Mail & GuardianConfusion about who should check a vessel meant to pick up 60 000 sheep has exposed fissures in the Covid-19 regulations
Read more »
DA calls for debt-relief law to be halted due to Covid-19The party says the act will restrict access to credit for low-income consumers and wants bridging finance available for SMEs at 0% interest
Read more »
Covid-19 red cards major events - The Mail & GuardianThe show must go on. Whatever hardships we’ve had to endure, that simple phrase has always been there to provide comfort and give us an excuse to continue with our favourite distractions. But this time the cliché may be insufficient.
Read more »
This private hospital was ‘unprepared’ when a Covid-19 patient calledA woman is now being treated in Groote Schuur hospital after her chosen Netcare facility initially turned her away.
Read more »