How COVID-19 Can Affect Your Business Contracts

The unprecedented fallout from the COVID-19 pandemic has left many business owners concerned about the status of their service contracts. In many cases, the pandemic has made it difficult or even impossible for parties to fulfill their responsibilities. From government-sanctioned shelter-in-place orders to constantly rising numbers of confirmed cases of the virus, organizations and individuals are shifting gears away from “business as usual” to staying at home to protect themselves and their families. 

Amid the uncertainty caused by this global change of pace, many are left wondering: are my contracts still enforceable? From business partners negotiating a merger to homeowners managing renovation projects, plans are left unfinished and leaving thousands – or in some cases, millions – of dollars hanging in the balance. What, then, is the remedy? Can you force another party to perform under a contract? 

It depends.

Many contracts contain what some have in the past considered to constitute merely “boilerplate” provisions, in other words, language that parties rarely disputed.  However, in light of COVID-19, these standard provisions provide some parties who want out of a contract with a viable argument to be released from what was a pre-COVID-19 fully enforceable contract.  Examples of such contract provisions include: force majeure, impossibility, impracticability, frustration of purpose.  Because every contract is unique, there may be other language in the contract that might release a party from its contractual obligations in light of COVID-19.

If you have  questions or need advice about  your contract, reach out to one of our attorneys for a consultation. At Green Mistretta Law, we are committed to delivering the best possible results for our clients and take pride in offering superior legal counsel. Give us a call or reach out online to learn more.

This article does not establish an attorney-client relationship and must not be construed as legal advice.