Force Majeure in California: Does the COVID-19 Pandemic Qualify?
A Three Part Series
By Stan Gibson and Jessica Newman
Part 3 – Practical Guidance: Force Majeure and the COVID-19 Pandemic
Practical Guidance for Addressing Force Majeure in the COVID-19 Pandemic
Parties on both sides of a contract must weigh their options when faced with a force majeure event and should take steps to ensure that they have a clear understanding as to their obligations, the claims being made by the other contracting party, and what steps they can take to mitigate their losses and/or protect their rights.
There are a number of steps a party can and should take to limit any potential liability in the midst of the current COVD-19 Pandemic.
Review the Terms of Your Contract
First, review the specific terms of your contract. Parties may contract around certain risks that might otherwise be viewed as a force majeure event. You will need to know what your obligations are under the contract and whether you, or the other contracting party, will still be expected to perform even in the face of these unprecedented circumstances. For example, a contract may include specific provisions that a strike or national emergency does not relieve a party of its obligations under the contract.