Pandemic prompts urgent review of overlooked contractual clause.

Byline: Barry Bridges

With the jolt of the coronavirus crisis still unfolding across the country, corporate lawyers in Rhode Island are observing an uptick in queries related to a boilerplate provision common to many commercial contracts that perhaps heretofore gleaned little attention: the "force majeure" clause.

According to Brian J. Lamoureux of Johnston's Pannone, Lopes, Devereaux & O'Gara, recent search trends from Google reveal that a substantial number of companies may be beginning to ponder the enforceability of their contractual obligations in a landscape in which material shortages are popping up in some sectors, and supply chains are being upended in others.

"For many years, no one had been searching 'force majeure,' and now all of a sudden there is a major spike to the extent that Google can't even scale it," Lamoureux said. "To see that was an 'uh-oh' moment for me, and it's only going to be a matter of time before we're navigating the issue in our practice."

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"For many years, no one had been searching 'force majeure,' and now all of a sudden there is a major spike to the extent that Google can't even scale it. To see that was an 'uh-oh' moment for me."

Brian J. Lamoureux, Johnston

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As for the critical question of whether the pandemic will constitute a condition that could excuse a party from upholding its end of an agreement, business lawyers are unequivocally saying "it depends."

"Whether the mere existence of a pandemic will reach the level of force majeure will depend on the exact language used in the contract, including the intentions of the parties if the language is unclear," said James H. Hahn of Partridge, Snow & Hahn in Providence.

He explained that while a contract's use of "pandemic" will be helpful to a party hoping to invoke force majeure in the current crisis, more vague terms such as "act of God" will invite disputes.

With the last pandemic in this country in 1918, Lamoureux pointed out that there are no published court opinions on the question and agreed that the first step is to examine the language of the parties' contract.

"Beyond explicit terms, there may be qualifying phrases such as 'including, but not limited to,' which could give some leeway. But would that include pandemics? Locusts? I think we are going to see a lot of litigation on the meanings of these clauses, and that makes my heart jump as a lawyer," he said.

'Act of God'

Adam J. Gwaltney of Nixon Peabody reported that his firm...