{"id":39812,"date":"2020-04-17T13:43:28","date_gmt":"2020-04-17T13:43:28","guid":{"rendered":"http:\/\/localhost:8888\/cregital\/disha\/2020\/04\/17\/force-majeure-clause-how-it-impacts-your-contracts-during-the-covid-19-crisis\/"},"modified":"2022-10-27T10:22:13","modified_gmt":"2022-10-27T10:22:13","slug":"force-majeure-clause-how-it-impacts-your-contracts-during-the-covid-19-crisis","status":"publish","type":"post","link":"https:\/\/msmehub.org\/staging\/6671\/force-majeure-clause-how-it-impacts-your-contracts-during-the-covid-19-crisis\/","title":{"rendered":"“Force Majeure Clause” How It Impacts Your Contracts during the COVID-19 Crisis"},"content":{"rendered":"

As a business owner, you’re probably wondering what will happen to the contracts that you have entered into with people or companies that you transact business with in light of the business disruption caused by the current global health crisis.<\/p>\n

You may also be wondering what this means for your undelivered goods and unrendered services which have been paid for by your customers. You’re worried that your customers might demand a full refund of their payments as you are breaching the terms of the contract you signed with them by not performing your obligations in the contract.<\/p>\n

Are you one of such business owners<\/a>? Well, you need not worry at all if your contract includes a force majeure clause and even when it doesn’t you may still have a cover.<\/p>\n

Importance of a Force Majeure Clause<\/strong><\/p>\n

Directly translated as “superior force”<\/em><\/strong> from its French origin, a force majeure is a contractual clause that frees both parties to a contract from any liability or obligation when an uncontrollable event, such as a war, strike, riot, crime, epidemic, pandemic or an act of God such as natural disasters, prevents one or both parties from fulfilling their obligations under the contract.<\/p>\n

Although this clause frees both parties from any liability, it sometimes does not excuse a party’s non-performance, but only suspends it for the duration of the force majeure.<\/p>\n

A force majeure clause is usually drafted like this:<\/p>\n

“In the event that either party is unable to perform its obligations under the terms of this Agreement because of natural disasters, strikes, acts of God, or any event reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes. Notice of a party’s failure or delay in performance due to force majeure must be given to the unaffected party promptly thereafter but no later than five (5) days after its occurrence which notice shall describe the force majeure event and the actions taken to minimize the impact thereof.”<\/em><\/p><\/blockquote>\n

(This is why you need expert hands<\/a> to help with all your legal documents, guys.)<\/p>\n

For most businesses, the Coronavirus outbreak with its resultant effects such as the lockdown in place in some states in Nigeria and movement restrictions in other states has made it nearly impossible to fulfill certain contracts. This should automatically trigger the force majeure clause in their business contracts (if it was included).<\/p>\n

So, what do we advise you to do now?<\/p>\n