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Will the Corona Virus give me grounds to get out of a contract?

From an outsider’s perspective, it may be difficult to understand how the Coronavirus could possibly enable a business or individual to get out of a contract. However, the Coronavirus, which is the informal name given to COVID-19 for which the World Health Organisation has declared a Pandemic may be an example of what is known as a Force Majeure Event.

What is Force Majeure?

A Force Majeure is informally known as an “act of God” and can occur as a consequence of a broad range of external circumstances.

Whilst a vast majority of contracts will never be able to rely upon a Force Majeure, it can sometimes provide legal grounds for a contract to be broken.

The Chinese government, for example, has recently begun issuing Force Majeure certificates which enable some businesses to exit contracts that they may have otherwise been bound to. However, for the people subject to the breaking of the contract, the certificate or the declaration may be insufficient and may result in a lawsuit for breach of damages anyway.

How does Force Majeure affect my business?

The economy is already beginning to feel a knock-on effect from COVID-19 in the form of reduced market sentiment and an inability for individuals to attend work. The lockdown of Australia from international travel and the proposed government stimulus package point to a larger and more alarming concern that COVID-19 is going to actively play a significant role in the weakening of the economy and the loss of jobs.

The lawyers at Executive Law Group have extensive litigation and commercial experience, investigating and assisting businesses in times of crisis. Our Lawyers would be happy to assist you during the Coronavirus pandemic in auditing your business and your contracts to assess the viability of pursuing a Force Majeure as a way of exiting a contract which may no longer be sustainable.

Additionally, if you have been affected negatively due to COVID-19 and someone else is attempting to enforce Force Majeure against your business, lawyers prepared for the Coronavirus like ourselves can provide advice and support in relation to the best way to enforce a claim for contractual breach or otherwise.