Timothy Murray examines risk-allocation issues, the litigation scorecard and the pandemic’s drafting lessons.
COVID-19 has had a chaotic impact on contracts large and small in industries across the country. As soon as the pandemic struck, profits plunged and many businesses sought to get out of their contractual obligations.
In this podcast, Timothy Murray discusses why courts are generally upholding those contracts and how the pandemic is prompting more precisely written force majeure provisions.
“It’s a golden opportunity for both lawyers and clients to relook at the way they draft those force majeure clauses, he says, adding, “A force majeure clause should not be regarded as a boilerplate provision.”
Courts throughout the nation have looked unfavorably on arguments that the pandemic justifies relief from commitments. “It’s eye-popping to see how difficult it has been for people to be excused of their contractual obligations,” Timothy says.
Commercial leases are the contracts most affected by COVID-19. Key factors in these disputes are whether the contract says rent is to be paid no matter what and whether the business was partly or fully shut down.
Timothy notes that in force majeure disputes in general, several factors need to be considered, including reminders that promises usually are not excused for a supervening event and that parties are allowed to contractually allocate.
In response to COVID-19, contracts now are including words such as “pandemic” and “epidemic.” “You need to spell things out,” Timothy says. “And you will be far less likely to ever be in a dispute on a contract matter.”
Listen to the full interview with Timothy Murray about the impact of COVID-19 on force majeure clauses.
About Tim Murray
Tim Murray is the lead author on the Corbin family of contract titles and is a partner at Murray, Hogue & Lannis In Pittsburgh. Tim has maintained Corbin’s leading position in the market with his expert updates to Corbin on Contracts and has recently applied his expertise to write the Corbin on Contracts Desk Edition as well as Corbin titles for Pennsylvania, Ohio, Illinois and Massachusetts. Tim is also finishing up Corbin titles that will focus on contract law in both New York and California with many others planned.
Tim’s most recent title: Corbin on Contracts: Force Majeure and Impossibility of Performance Resulting From Covid-19 demystifies the thorny legal issues surrounding force majeure and commercial contracts during the pandemic.