The COVID-19 pandemic has impacted everyone. It has left many individuals and businesses wondering how they are going to survive the fallout. While the COVID-19 pandemic has led to a significant public health crisis, along with an economic one, there could be a legal crisis looming on the horizon as well. This could come in the form of numerous breach of contract cases.
It is no secret that businesses are suffering during this difficult, unprecedented time. With record numbers of people getting laid off and some small businesses closing their doors never to reopen again, most business owners are just looking for a way to survive. They might not even be thinking about the contracts they signed with their suppliers. After all, everyone has to make sacrifices in order to make it through this pandemic; however, this might also lead to something known as a breach of contract.
There are several ways that a breach of contract case might manifest. The first example has to do with the business breaching its contract with the supplier. Because many people are being forced to shelter in place, businesses aren’t enjoying the same revenue stream as usual. As a result, they might be unable to pay for the supplies delivered to their business. This could lead to a potential breach of contract case.
The other way that a breach of contract case might manifest is in the exact opposite direction. There are cases where a supplier might not be able to fulfill its end of the contract. For example, there might be raw materials coming from other parts fo the world that might still be shut down. As a result, suppliers might not be able to deliver their supplies on time. They might not even be able to deliver them at all. This could lead to a breach of contract case.
Regardless of the reason why, breach of contract cases are always serious. They could end up in the courtroom, where the judge might rule that one party is entitled to damages as a result of the breach of contract. On the other hand, there are situations where the judge might rule that the breach of contract case is unenforceable. This could take place if there is a clause known as a force majeure.
A force majeure is a clause in many contracts that basically says there was a massive unforeseen event that renders the contract unenforceable. This could be used to prevent one party from recovering damages stemming from the breach of contract. There are several common types of force majeure. For example, a global pandemic might qualify as a force majeure. In addition, if a business was forced to shut down due to changing government regulations, this might qualify as a force majeure as well. In order to activate this clause, the activating party will still have to argue that their event qualifies as a force majeure. Furthermore, this might not work if there isn’t a force majeure clause in the contract. This is why it is important to work with a trained legal advisor for breach of contract cases.