Construction Law Insights

With the COVID-19 virus (Coronavirus) impacting everyday life, you may have heard people in the construction industry asking “has anyone reviewed the force majeure provision in our contract?” But what does “force majeure” mean and what impact does it have on your contract?

In general, force majeure means an unforeseeable circumstance that prevents someone from fulfilling a contract. People often associate the term with the idea that they cannot perform a contract because of an “act of God” like floods, tornados, or fires, but the application of the provision really depends on how your contract is drafted. For example, a force majeure provision can be drafted to also include war, civil riot, epidemics, and pandemics. With the spread of the COVID-19 virus (Coronavirus), the last two circumstances are very relevant to current events.

Often, but not always, a contract will state that a party is not in breach of its contract if the party is prevented from performing its obligations under the contract due to a force majeure event. In such situations, contracts may state that the party is entitled to an extension for the performance of its contractual obligations. Sometimes the contract may even state that the party is entitled to additional money (ex. extended general conditions or general requirements). However, it is common for construction contracts to include a deadline for when you must submit a claim related to force majeure events, after which you may be deemed to have waived your right to claim for additional time and/or money.

Whether your contract deems the COVID-19 virus (Coronavirus) to be a force majeure event and, if so, what your contractual remedies are will depend on what is written in your contract. With this in mind, we encourage you to protect your contractual rights and reach out to PLDR or your attorney during this unprecedented time and ask about the implications of the COVID-19 virus (Coronavirus) on your obligations under your contract.

PLDR Law Mark Burgin 1

 


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