Is the Coronavirus Pandemic (COVID-19) a Force Majeure Event?

Currently, many contracts, appointments, and other activities are being cancelled due to the coronavirus pandemic (COVID-19). While most contracts and reservations will be cancelled without refunds (and some companies have announced proactive refund), the coronavirus pandemic may trigger a force majeure or “act of god” event. In many legal jurisdictions, including Maryland and Washington DC, a force majeure clause within a contract can — under certain circumstances — protect a party from a breach of contract action.

A force majeure clause is a provision in contracts that can, in certain circumstances, excuse a party’s contract performance due to certain “acts of god” or other uncontrollable acts. In most jurisdictions, including Maryland and DC, in addition to the actual force majeure clause, courts will “look to the language that the parties specifically bargained for in the contract to determine the parties’ intent concerning whether the event complained of excuses performance.” (National v. Hyatt Regency Washington). Specifically, a force majeure clause is “not intended to buffer a party against the normal risks of a contract;” however, a “force majeure clause interpreted to excuse the [party] from the consequences of the risk he expressly assumed would nullify a central term of the contract.” (Langham-Hill Petroleum Inc. v. Southern Fuels Co.). Thus, addressing a force majeure clause in a contract can be complicated, and what type of event can trigger such a clause is also often debated without court cases.

Ultimately, a disease pandemic such as the coronavirus pandemic (COVID-19), in which a National Emergency is declared and most states (including Maryland) have also declared a State of Emergence, could be interpreted by courts as a force majeure event which could trigger permissible termination of contracts. Nonetheless, it is also important to note that force majeure clauses are not always allowed to excuse a party’s contract performance. (Coker Intern., Inc. v. Burlington Industries, Inc).  Further, some clients are turned off by force majeure clauses in contracts, so many business prefer not to include force majeure clauses in their contracts with customers. Nonetheless, force majeure clauses can be placed into contracts and can be sometimes used to excuse a party’s contract performance.

If you would like to speak to Adam Van Grack or one of our other contract attorneys about a contract matter, force majeure issue, or coronavirus pandemic (COVID-19) concern, Mr. Van Grack and our other Maryland and Washington DC contract attorneys will review your matter and the contract of concern to determine what the parties’ contractual obligations are and if liability is an issue. Our Maryland contract litigation legal team will guide you on the best  action for an efficient resolution. Specifically, Longman & Van Grack’s contract attorneys have handled breach of contract disputes and contract lawsuits in Montgomery County Circuit Court (located in Rockville, MD), DC Superior Court, Howard County Circuit Court (located in Ellicott City, MD), Frederick County Circuit Court, Prince George’s County Circuit Court (located in Upper Marlboro, MD), Baltimore County Circuit Court (located in Towson, MD), and the Baltimore City Circuit Court. Contact Mr. Van Grack or our other attorneys at (301) 291-7156 for a contract or force majeure consultation today at our Maryland Offices (Rockville, Bethesda, Montgomery County).