COVID-19, force majeure and frustration

Introduction

Around the world right now, companies – especially their in-house counsel – are pulling up from dusty databases the force majeure clauses of contracts. Often boilerplate, they have been rarely considered, because it is rare for an “act of God” or one of the other standard listed events to come up. Yet now, COVID-19 has arrived in full force. At a construction company, someone asks: “We haven’t yet received raw materials from China due to the lock-down and logistics issues: can we rely on the force majeure clause as an excuse for delay in our work?” In the pharmaceuticals sector, a representative poses the question: “Thanks to Trump, sales of Hydroxychloroquine are through the roof, and we’re struggling to satisfy orders: can we refer to force majeure or frustration as regards any failure to supply?”