When Do Force Majeure Clauses Excuse Performance?

The coronavirus pandemic and its resulting business disruptions have thrust force majeure clauses – which may offer parties to a contract the opportunity to delay or forgo performance due to unforeseen circumstances – into the spotlight. Amidst all the other uncertainties introduced by the pandemic, PE sponsors are being forced to confront the possible exercise of force majeure provisions by their key service providers or by critical counterparties of their portfolio companies. Two recent seminars – one presented by the New York State Bar Association, featuring attorneys from Offit Kurman, and the other by Dentons, featuring two of its attorneys – holistically considered force majeure provisions and their applicability to the coronavirus pandemic. This article synthesizes key takeaways from each presentation, including what constitutes force majeure, the legal principles governing force majeure clauses, other legal principles that may excuse performance and issues to consider when drafting force majeure clauses. See “Withstanding the Coronavirus Pandemic: Business Continuity and Other Operational Risks (Part Three of Three)” (Apr. 7, 2020).

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