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Force Majeure: Addressing Contractual Issues Post COVID-19 By Kamo Sende Esq.

The global universe has come under attack from the novel Coronavirus Disease (COVID-19) – businesses have been halted and the whole world has in fact been shut down in an attempt to contain the spread of the virus. This shut down is said to be affecting about 2.7 Billion workers who represent about 81% of the World’s workforce.

As expected, the global shutdown of nations has occasioned a plethora of contract breaches, the fulfilment of which was expected within these periods that have been taken over by the virus.

Post the COVID-19, our courts will be littered with litigation arising from these breaches and it will behove on the courts to determine the breach and the amount of damages commiserate to same if necessary.

Whilst this will be happening, expectedly, those brought before the courts for the breach would raise for themselves a defence as to the breach. Many people have opined that the defence of force Majuere will be available to defendants to explore in order to save themselves. Whilst this is not outrightly endorsed, – what is most certain is that more than anytime in recent history, the concept of force majeure will come before the courts for proper interpretation.

FORCE MAJEURE.
Force Majeure  is a French word which means “superior force”. It is described as an unforeseeable circumstance that prevents someone from fulfilling his part of a contract. It is an irresistible compulsion or superior strength – simply put, it is an Act of God – one which the party in breach had no control over nor could he easily foresee. 

Force Majeure is a clause generally used in a contractual agreement to describe events that are entirely outside the control of parties to a contract. The central purpose of the clause is to absolve the parties from liability in the event they cannot fulfill the terms of a contract for reasons which go beyond their control.

In order to be considered a force majeure, certain factors have to be evident in an event. They include:

Unforeseeability – This entails that the party in breach could not have ordinarily foreseen the act which has led to his breaching the contract – that same was not anticipated nor was it a creation of the party in breach.

External factor – that the event that has led to the breach  was not a contemplation and/or result of actions committed by the party in breach himself or an associate/agent of his either acting on his direct command or within his reasonable permutation of the act being occasioned.

Irresistability – the event was of such a nature that there was no way for the party to take appropriate counter -measures before or during the event to halt an effect that could lead to its breaching the contract.

FORCE MAJEURE AS A DEFENCE POST COVID 19
Post the COVID-19 virus, the courts will be littered with suits pertaining to breach of contracts and it is cheap prophesy to foresee that a lot of those who would be brought to court will rely on force majeure as a defence to their breach – when this is done, the courts will be constrained to decide at that point if the defence of force majeure will avail most of the defendants especially those whose performance was strictly based on material within Nigeria.

One of the central questions the court will have to dissect is whether it was reasonably foreseeable that been a communicable disease, the COVID-19 could have been foreseen by parties to contracts as one that would get to Nigeria especially giving Nigeria’s trade relationship and frequent citizens travels to the nation of China where the virus emanated  months before it got to Nigeria.

Questions will arise whether the breaching party could have bore in mind this possibility, foreseen it and made attempts to resist it or do other acts that would have made sure there was no  breach.

It must also be mentioned that for force majeure to be applicable, there must be a connection between the force majeure event and the performance  that made it impossible to perform the contractual obligations. This implies that the party in breach must specifically prove that the COVID-19 hindered his performance as it will not be enough to just rely on the fact that it did halt business transactions.

As a general rule, for force majeure to apply, it must be expressly contained in a clause in the contract in breach. Many contracts including those drafted by legal practitioners have always underrated this position as space consuming. Post the virus, most defendants who will be raising force majeure as a defence without having it contained in their contracts will rely strictly on the discretion of the court to do justice whilst been faced with a vehement opposition of in fact raising it when same is not contained in the contract in breach from the Plaintiff.

One way or another, the courts will determine this and enrich our jurisprudence determining amongst other things whether that provision can have further life in the future.

In determining if the defence of  Force Majeure will avail,  attention will be paid to the construction of the contractual terms  and same will largely depend on the scope of events addressed by the clause in the agreement.

It must be stated that where time is not of the essence and the room to specifically perform the contract is still open even after the COVID-19 pandemic, it will be mischievous and highly unreasonable for anyone to even contemplate breaching a contract only to turn around and plead Force Majeure as a Defence – the question would arise however if same was contained specifically in the contract. The courts will have to deal with more than the clause in such a circumstance.

However, where time is of the essence, it will therefore be instructive to look at the nature of the contract in order to determine whether the defence of force Majuere will avail the party in breach

On the whole, Force Majeure being availed as a defence post COVID19 will depend on the distinct facts in each breach and may not wear a uniform robe in all matters that it is raised.

CONCLUSION
As stated previously, for force majeure to avail as a defence, it must be clearly stated in the contract. Recourse will be made to other defences of non performance in Common Law  such as impossibility, impracticability and frustration by a lot of defendants but those who latch on the more convincing defence of force Majeure will have a herculean task to convince the court to exercise its discretion in their favour – never mind that the clause of force majeure is not contained in their contract.

In addition to the flesh that these suits will add to our jurisprudence, this pandemic will emphasize details in drafting future agreements and will stamp as non negotiable the need for same to be drafted and/or reviewed by Legal Practitioners.

It is submitted that post this pandemic, the need for arbitration and dispute resolution over litigation will become evident. A lot of parties in a contract will see need to relax most of their rights and concede to a lot bearing in mind that all peoples of the world have been tested by the virus – Whatever the phase it comes with, the future beyond this pandemic looks interesting for our jurisprudence and we all look forward to it.

References:
1. Contractual Obligations And The Doctrine Of Force Majeure: Covid-19 A Permissible Event? Published on thenigeriaLawyer.com By Mayowa Ogunsan

2. COVID19 and contracts of Employment: Issued Arising Presented on the Isolation Learning Webinar by Dr. Babatunde Ajibade SAN

3.  https://en.m.wikipedia.org/wiki/Force_majeure

Kamo Sende is a Kano based Legal Practitioner and human rights activist.

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