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.
Show Me the Money!
You told the guy to do the work, the work is done, and now it’s time for payment, right? But, you only told […]
Reasonable ≠ Ratio
“Circuit court litigation comes at a price, sometimes a heavy price.”
Words Matter
Remember the adage, “what you say today could bite you tomorrow.”
Recently, a Contractor won its argument before the Armed Services Board of […]
Run Through the Base, Not To the Base
Run Through the Base, Not To the Base
Thankfully, baseball season is back. While listening to a broadcast of my favorite team yesterday, […]
Having Your Cake and Eating It Too: Attorneys Fees Without a Contract Clause
How often have you wanted to take a dispute “to the mattresses” (think, The Godfather), but the cost was prohibitive? You have […]
Choose Your Own Venue: Where to File a Miller Act Lawsuit
Do you remember the Choose Your Own Adventure books? If you are a subcontractor on a federal project, where should you […]
Speak Now or Pay Later
This applies to general contractors, subcontractors, and suppliers. Each can be the party preparing and transmitting a form of purchase order or […]
General Contractors Waive Goodbye
General Contractors: When was the last time a private owner asked you to waive your lien rights before you did any work? […]
Unripe Mediation Can Be Bitter
Ripen the dispute for mediation with a gradual exchange of information over time.
