COVID-19 Coronavirus: Contract Performance

In the context of COVID-19 pandemic and subsequent lockdown measures, many professionals are facing difficulties, if not impossibility, to fulfill their contractual commitments. Yet contracts are still binding. In the hypothesis where renegotiation of the contract is not possible or would not be sufficient to overcome the difficulties to perform the contract, force majeure could prove to be a useful tool to protect professionals who are exposed, in good faith, to the temporary or permanent impossibility of fulfilling their contractual commitments provided that the specific terms of the contract regarding force majeure and legal requirements are strictly observed.

Read our guidance: How to deal with private law contract enforcement issues under French law? (France) - April 6, 2020

COVID-19 constitutes a force majeure event. However, if the risk of unforeseen events like the COVID-19 pandemic is fully attributed to one party in the agreement, that party might not be entitled to request an adjustment of the terms of the agreement, or to terminate the agreement, and might even be held liable for the damages caused by the non-performance under German statutory law.

Read our guidance: Impacts of COVID-19 on the Performance of Contracts Under German Law (Germany) - March 25, 2020

We examine the key issues around contractual non-performance and termination under English law. Any party either seeking to rely on force majeure or frustration or in receipt of a notice relying on these concepts should consider its options carefully and take appropriate advice.

Read our guidance: English Law Considerations on Force Majeure, Frustration and Termination (UK) – March 23, 2020

Parties to commercial contracts – whether seeking to enforce counterparties’ contractual obligations or seeking to be excused from their own performance – must consider the potential applicability of the following defenses.

Read our guidance: Will Global Pandemic Excuse Contractual Performance? (U.S.) – March 17, 2020