In the first of our series of 19-minute teleconferences on the impacts of COVID-19, leaders of our COVID-19 Task Force discussed force majeure provisions and the doctrine of impracticability as they apply to commercial contracts in the United States.
Key Takeaways from the Teleconference Include:
- Consider establishing a process for assessing how force majeure will affect your business to include review of contracts and preparation of notices to customers and affected partners
- Consider sending regular updates to customers but be wary of assuming they will count as notices under your force majeure clause
- Send a force majeure notice before the breach occurs
- The availability of a defense of force majeure depends on contract language and possibly, state law
- Consider establishing and documenting allocation methods if products become scarce
- We’re in uncharted waters here – no one knows how this is going to shake out. The law is sparse and in very different contexts
