COVID-19 and frustration of contracts

▤ Summary

In some cases organizations may be unable to meet their commitments under contracts where supplies of raw material or labour become unavailable. Many employers may face a sudden lack of work and/or a need to socially isolate employees which might require reorganization of the workplace. Under the doctrine of frustration, a contract is deemed at an end if an external event, beyond the control of either party, renders the continued performance of the agreement impossible. Traditionally “Act of God” events have referred to natural disasters, such as earthquakes, floods or tornados. Ultimately organizations considering adjusting their work force or contemplating not performing contractual commitments to stay afloat in these unpredictable times, should contact a legal professional to consider their specific circumstances and whether the law of frustration applies.

▦ Linked Companies

First Reference

$1M to $5M