LEGAL PERSPECTIVE: Force Majeure raises difficult legal issues by Dr. AbdelGadir Warsama, Legal Counsel, Bahrain

Legal contracts are enforceable by law and to be performed as agreed. This is a golden rule in contracts law. The contract is the will of the parties and protected by the law. Business, is now facing challenges from the coronavirus pandemic, including the ability to perform contracts for many reasons including Gov. instructions prohibiting gatherings, meetings, work from home., etc. This situation, among others, will open the door for tough litigation mainly for lack of performance.

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In litigation instances, each party will try to find a suitable room in force majeure clauses. Generally, force majeure standard clause provides “the performance of each contracting party, under this agreement is subject to acts of God, war, government regulation, terrorism, epidemics, disaster, civil disorder, or any other emergency beyond the control of the parties, etc., making it impossible to perform their obligations under this Agreement. Either party may cancel this Agreement for any one or more of such reasons upon written notice to the other”. However, not necessarily, to follow such standard clause and there are many other clauses depending on the merits of each case, as agreed by the contracting parties. In all cases, parties shall be very careful while discussing force majeure events.

Many legal issues could arise from the language of the contract and the force majeure clause. We anticipate that Courts will play a very important role in giving different rulings regarding force majeure due to coronavirus. There are many points to be addressed, this could include, if the contract contains an applicable force majeure clause or otherwise? As force majeure clauses are normally construed narrowly and only applied to the events listed in the contract. Therefore, a clear force majeure clause shall be agreed upon. If there is no clear clause, can we take that, the force majeure is foreseeable? I believe that, Courts may independently inquire whether the applicable event was truly an unforeseeable force majeure.

Also, Courts may look into whether performance was attempted and failed before excusing performance for a force majeure. Another point, was it the force majeure that rendered performance impossible? It must be the force majeure that renders performance impossible. The parties should pay careful attention to the requirements of the contract as taking due diligence, giving notice, or others before force majeure can be raised. Sure, Courts will enrich our legal literature in this vivid area.

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