Force Majeure in California: Does the COVID-19 Pandemic Qualify?
A Three Part Series
By Stan Gibson
Part 2 – Asserting Force Majeure
See Part 1 – What Constitutes a Force Majeure
See Part 2 – Asserting Force Majeure
See Part 3 – Practical Guidance
When to Assert Force Majeure
As discussed in Part I, the party claiming inability to perform must be able to show that its performance is impossible or unreasonably difficult due to unforeseeable circumstances beyond its control. Typically, a claim of force majeure is made as an affirmative defense to a claim for breach of contract.
Where a force majeure event is claimed the party faced with the claim has two options. The party may “treat the repudiation as an anticipatory breach and immediately seek damages for breach of contract, thereby terminating the contractual relationship between the parties, or [they] can treat the repudiation as an empty threat, wait until time for performance arrives, and exercise [their] remedies for actual breach if a breach does in fact occur at such time.” Although California law “authorizes the injured party to immediately seek damages” it does “not require the injured party to seek damages or lose the right to treat the repudiation as an anticipatory breach.” If, however, a party “continues to accept the [repudiating party’s] performance, [it] may be deemed to have waived the breach.”