Business Contract Language in the World of COVID-19

Written by: David Montgomery

Updated: 3/19/2020

contract

With the continuing spread of Covid-19 and the ever-shifting efforts to contain its spread by Local, State and Federal Government, many of our clients have contacted the firm in relation to contract performance and maintaining their obligations thereunder.  Without question we are dealing with extraordinary circumstances not before seen in anyone’s lifetime.  The collective hope is that the current disruptions will be short lived in both the risks to exposure and also the duration of economic impact to follow.  One thing is certain, however, parties will be looking to their business contracts to either enforce the same or find carve outs for excusable delays or non-performance.  This issue is often addressed within a force majeure provision.  The language of such a force majeure provision, however, may not address current circumstances, including pandemics, epidemics, imposed governmental regulations, etc.  It is also noteworthy that “an Act of God” may not include monetary obligations.  In other words, such a provision excuses performance, but not payment obligations. 

           Having appropriate language within your business contracts and/or your standard terms and conditions may prove critical in the weeks and months to come.  This includes language tied to your existing obligations, or the need for supplemental language in future contracts.  While we fully recognize our clients are navigating and prioritizing a myriad of issues and business concerns at the moment, we want you to know that we are here to help.  If you would like any of our business attorneys to review your existing contract language (either existing contracts or your contract forms for future use), standard terms and conditions, or the applicability of an existing force majeure provision under current circumstances, we would be happy to do so. Please call us at 937-223-1130.

Stay well and be safe.

AUTHOR: David Montgomery
dmontgomery@pselaw.com