Another post discussed that your existing contract can probably handle the risks related to COVID-19. But, what to do if you contract lacks the support to handle COVID-19 and what to consider when creating new contracts during COVID-19?
What if the contract does not have a force majeure or other relief clause? First, consider the language of any applicable changes clause. Second, review any governmental emergency relief acts that could help. Third, the common law doctrine of frustration may be available, under which an obligation may excused or discharged when a fundamental assumption of the contract is not true or something later occurs rendering performance physically impossible or commercially impracticable. However, a radical price increase alone is likely insufficient.
When creating new contracts during COVID-19, do not rely solely upon force majeure clauses. Because unforeseeability is an element of most clauses, parties contracting during an event will find it very difficult to argue they could not contemplate the potential impact of the event. Consider including or adapting a price acceleration provision to prescribe or liquidate relief.
Roads& Bridges | Confusing Waters
CONFUSING WATERS | A Supreme Court ruling leaves room for ambiguity
What happens when there may be a “significant nexus” between “adjacent” and/or […]
Roads & Bridges | Authority Defined
AUTHORITY DEFINED | The Law of Agency is Important to Understand
For any project, this Russian proverb is helpful: Doveryay, no proveryay – […]
Jurisdiction is Power
Not bad power, but the ability of a decision-maker (e.g., court) to decide which side is right (or which is more correct). […]
Roads & Bridges | Defining Labor
DEFINING LABOR | How the Miller Act continues to shape the industry
In the late 1700s, risks of nonpayment caused a shortage of […]
Roads & Bridges | Mediation Melee
MEDIATION MELEE| An arbitration case can be costly
Arbitration can be a bridge over troubled waters. In this crossing, the parties argued over […]
Roads & Bridges | Written Notice
WRITTEN NOTICE | Beware that strict compliance of the contract might be required.
When an owner replaced a contractor for significant safety violations, […]
Roads & Bridges | Mommie Dearest
MOMMY DEAREST | The story of an ESA without a MOM
Nobody enters this world, or a contract, without a mother: There can […]
IIJA | Does Closing a “Giant Loophole” Cost Contractors?
A recent article published by Roads and Bridges magazine reports that the Office of Management and Budget is working to broaden the scope […]
Roads & Bridges | Buy American Plan Gets an Update
BUY AMERICAN PLAN GETS AN UPDATE
The Office of Management and Budget is developing standards to replace the current Buy […]
Jonathan J. Straw
Blog Author
Contact Jonathan
Partner | KraftsonCaudle.com
Download Jon’s Bio
