Does Force Majeure Cover Pandemics? Two Legal Opinions

To be classified as force majeure, an event must be beyond the control of the contracting parties, it cannot be anticipated, foreseeable, or expected, and the event must be unavoidable. A Canadian and a U.S. law firm share their opinions about contract language and legal coverage.

Members of law firm Osler, Hoskin & Harcourt LLP, recently wrote in Canada’s Journal of Commerce that the list of force majeure events included in many Canadian contracts does include epidemics or pandemics. “The Ontario Independent Electricity System Operators’ (IESO) forms of agreement include a specific reference to ‘epidemics’ in the definition of an event of force majeure.” Other jurisdictions in Canada, such as Alberta, have adopted those references. Not all contracts specifically mention epidemics and pandemics, but the attorneys suggest an event like COVID-19 might still come in under the wire. The Canadian Construction Documents Committee (CCDC) stipulated price contract and the CCDC 5B construction management contract indicate that COVID-19 could qualify as a force majeure if the definition includes open-ended language covering causes beyond the party’s control.

A Construction Dive blog post from U.S. attorney Trent Cotney, CEO of Cotney Construction Law advises that, for companies that have force majeure clauses in their standard contracts, it would be wise to review and make sure they provide clear, comprehensive, and adequate protections for the company and consider whether additional should be added to their force majeure clauses in light of the threat posed by the current coronavirus outbreak, as often courts will interpret the clause based on what is specifically listed in the contract. It could be argued that COVID-19 does not qualify as a force majeure event in contracts executed after December 2019 when the virus became known.

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