8. Force Majeure, Impossibility, and Frustration of Purpose

• Pages: 157-173
• Author: Michael R. Daglio,Andrew F. Gann Jr.,Mitchell D. Diles

8

Force Majeure, Impossibility,

and Frustration of Purpose

Michael R. Daglio, Andrew F. Gann Jr., and Mitchell D. Diles1

An infectious disease epidemic may be outside contracting par-

ties’ control, but a well-crafted force majeure provision negotiated

at the time the contract is made will provide the parties with a

roadmap for how to proceed and their respective obligations. Such

a provision reduces the likelihood of litigation over whether one

party should be obligated to perform under the agreement. In the

absence of a force majeure provision, and sometimes even with

one, the common law concepts of impossibility, impracticability,

and frustration of purpose may be applied by the courts in sub-

sequent litigation. These legal principles, and best practices, are

discussed in this chapter.

In an outbreak, epidemic, or pandemic, health authorities and fed-

eral, state, and local governments issue proclamations, states of

emergency, recommendations, and orders affecting the assembly and

1. Michael Daglio is a litigation partner at McGuireWoods LLP. Andrew F. Gann

Jr. is a litigator at McGuireWoods LLP. Mitchell Diles is a litigator at McGuire-

Woods LLP.

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movement of people. These actions force some companies to tempo-

rarily close or curtail their businesses and cancel or postpone events.

Manufacturers and suppliers, on the other hand, may struggle to

meet demand for some products while the demand for other products

all but disappears.

The modern economy requires written contracts, whereby parties

reach a meeting of the minds and legally bind each other to perform

certain acts in the future. The failure to perform under a contract

generally constitutes a breach and entitles the non-breaching party

to damages. When the truly extraordinary and unexpected happens,

however, three concepts may offer relief: force majeure, impossibility,

and frustration of purpose. Although the courts in different states

interpret these legal concepts somewhat differently, the intent here

is to address the general concepts and their potential application fol-

lowing an outbreak, epidemic, or pandemic. Such a discussion is nec-

essary because the protections afforded by each legal concept may

ultimately depend upon the magnitude of the disruption.

Force Majeure

Literally translated, force majeure means a “superior force.”2 In

a contract, a force majeure clause excuses performance due to an

extraordinary event outside the parties’ control. It allocates “the risk

of loss if performance becomes impossible or impracticable, espe-

cially as a result of an event or effect that the parties could not have

anticipated or controlled.”3 The use of force majeure provisions dates

back centuries, and attention to the provisions ebbs and ows with

wars, famines, strikes, natural disasters, and pandemics. In more

recent decades, parties often, but did not always, include such pro-

visions. When included, such a clause typically was the product of

limited negotiation, and more often boilerplate, meaning language

taken from an earlier agreement without much consideration. The

COVID-19 pandemic,4 however, provided a sharp reminder of the

2. Force Majeure, B’ L D (11th ed. 2019).

3. Force Majeure Clause, B’ L D (11th ed. 2019).

4. COVID-19 is an infectious disease caused by the SARS-CoV-2 virus. See Corona-

virus Disease 2019 (COVID-19), Situation Summary, Centers for Disease Con-

trol and Prevention (Apr. 26, 2020, 2:05 PM), https://www.cdc.gov/coronavirus

/2019-ncov/cases-updates/summary.html.

158 Infectious Disease Litigation

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