The steps taken across the world in recent days to try to combat the spread of COVID-19 are having a very significant impact on businesses across numerous sectors, as workers find themselves unable to go to work or to travel, manufacturing and transportation operations are disrupted, and events and meetings are cancelled. This bulletin briefly addresses what consequences the COVID-19 outbreak and the measures adopted in various countries might have on contracts governed by English law, looking in particular at:
- In what circumstances a party might be able to claim Force Majeure, and so suspend or discharge its contractual obligations;
- If Force Majeure is not available, whether a party might be able to claim that their contract is “frustrated” and so no longer binds them; and
- What factors will be relevant in deciding whether Material Adverse Change clauses are triggered.
If you wish to discuss any of these issues further, please reach out to any of the authors listed below, or to your usual Debevoise contact.