Bergen County Lawyer for Contract Disputes

Pandemic-Related Contract Disputes and Force Majeure

Contract disputes were already difficult to navigate before the pandemic, which is why parties with contracts affected by COVID-19 must become familiar with common issues they might encounter.

Underlying contracts in these disputes will often have provisions concerning unforeseeable events that may prevent or impede the performance of contractual duties. An example of these provisions is a force majeure clause, which can release the breaching party from liability if certain unforeseeable events beyond the party's control occur.

Litigation for pandemic-related contract disputes will also determine if the “triggering event" in question can be considered an occurrence that excuses nonperformance. Nonperforming parties will be claiming the pandemic or certain government restrictions, or even both, should excuse their breach.

• If the contact was created after initial reports of the pandemic, you can expect parties to argue over whether the pandemic or government action was sufficiently "unforeseeable" to count as a triggering event.
• If the contract was created before the pandemic was reported, nonperforming parties will claim this qualifies as an unforeseeable occurrence that was beyond their control.

Nonperforming parties will need to prove that the triggering event was the "proximate cause" of their inability to perform contractual duties.

A valid defense will include the following elements to establish proximate cause:

• A direct causal link between the triggering event and nonperformance
• How the nonperforming party conducted its due diligence to avoid the effects of the triggering event
• Which reasonable alternatives were exhausted by the nonperforming party

If you are anticipating a contract dispute because your business contracts were impacted by COVID-19, please don’t hesitate to get in touch with our law firm so we can assess your situation and get started building a strong legal strategy to protect your best interests.

Our business law attorneys have served a wide range of clients—including property management companies, apparel manufacturers, family enterprises, restaurants, technology companies, internet consultants, and music and language schools. No matter what your business or your legal issue, we provide top-quality and experienced legal counsel for your case. At M. Ross & Associates, LLC, we are ready to help and deliver results-driven solutions.