Acts of God: Does a force majeure clause cover COVID-19 or recession delays in construction?

Find out if your force majeure clauses cover Coronavirus or recession delays from a construction attorney. Get additional questions answered by attorneys for free here: https://lvl.st/ask-question

-What does force majeure mean in construction contracts? (0:14)
Force majeure literally means “superior force” or “act of God.” It refers to extreme, unforeseeable circumstances, something no one could see coming - like a global pandemic crushing the economy and preventing people from physically reporting to work. Things like hurricanes, floods, and earthquakes could qualify as well depending on the circumstances.

-Does the Coronavirus outbreak and shutdown trigger force majeure clauses? Is the Coronavirus outbreak an Act of God? (0:27)
Considering this coronavirus outbreak and shutdown were largely unpredictable, as well as its impact on the economy, this pandemic will likely trigger most force majeure clauses. What’s more, some really detailed force majeure clauses will specifically cite a pandemic as a trigger for the clause - so that’d be a cut and dry case.

-Will force majeure clauses affect my contracts? (1:33)
Unless there’s a force majeure clause in your contract or a contract with one of your customers or vendors, then it probably won’t affect your agreement.
So, it’s crucial to look at the contract for language relating to “force majeure,” “acts of God,” or other language referring to unpredictable events, delays, or termination. Further, even if there is a force majeure clause, the actual language of the clause will be crucial for determining the exact effects the clause will have.

Put extremely simply, whether or not the force majeure clause affects your contracts willl usually boil down to 2 things:
1. Is your force majeure clause triggered by the coronavirus scare, the government shutdowns, or the fallout of either?
2. Has that affected your ability to perform such that you need to delay, suspend, or terminate performance?
If it’s become impossible, illegal, or impracticable to continue performance - then you might be entitled to relief under your force majeure clause.

-How will force majeure affect your contract, specifically? (2:52)
Force Majeure clauses usually manifest themselves as delay clauses. So, if an Act of God occurs, force majeure can create allowable delays, suspend the contract obligations entirely, or even serve as grounds for terminating the contract. Delays are more common, though.

-What are your potential rights under a force majeure clause?
1. Extension of time/ excusable delay
2. Suspension of performance
3. The right to termination or partial termination

-What should I do when an Act of God occurs? (3:33)
Just because an act of God happens doesn’t mean you can just lie down. You’ll still need to directly tie that force majeure event to your situation - usually showing why work couldn’t be completed on time or why work can’t continue because of the event.

Important factors when considering a force majeure clause include:
1. Did the event cause the delay or inability to perform?
2. Were the circumstances out of your control?
3. Were there any reasonable steps that could be taken to mitigate the effects of the act of God?

-How do you trigger your force majeure clause? (4:28)
Some contracts might provide specific instructions. Sending written notice to the other party is probably wise and often required.

On that notice, you’ll want to lay out the specific event, why you’re unable to perform your work or stay on schedule, and even an outline of ways you tried to make things work could be a good way of going about it. And, obviously, you’ll need to provide what you’re claiming (whether that’s a specific delay claim, suspension of your work, termination, etc.).

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