These crazy times have affected every aspect of our lives. This includes both our personal and business lives. Business law has not gone unaffected, which begs the question, can these crazy times be used as an excuse to not perform a contractual obligation? Well, like much in the law, the answer is, it depends.
Force majeure clause overview
Force majeure clauses are clauses written into most contracts that, essentially, cancel contracts. The cancelability is based on the impossibility of performance due to an event or effect that cannot be reasonable anticipated or controlled, like a war or natural disaster.
Specifically, force majeure clauses can entitle one or both parties to a contract to terminate a contract, but it can also allow for other alternatives. For example, it could also delay performance or excuse performance in whole or part.
Causal link
To use the events of this year to active a contract’s force majeure clause, the one seeking its invocation must show a causal link between something specific that happened this year (the force majeure event) and the invoking party’s failure to perform. In other words, courts have stated the causal link test as showing “but for” the force majeure event, the invoking party would have been able to perform under the contract.
Business law and litigation is complicated in Detroit, Michigan, regardless of when it occurs. Though, during this year, litigation has become even more complicated. This is why it is so important to contact an attorney prior to entering any business contract, and when one cannot perform under the contract, a call to an attorney is also warranted.