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What is force majeure? What if my contract is impossible to perform? What are my options?

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As a result of the current pandemic gripping the United States and the world, companies everywhere have been overwhelmed by the loss of customers and the need to reduce operations, layoff staff, and transform their businesses in ways they could never foresee.  The loss of business caused by the COVID-19 pandemic has put many businesses in jeopardy of defaulting on contracts, either because of an inability to pay, lack of demand, or both.

 As a business owner, you must consider your options and potential remedies. One ancient doctrine of the law – that of force majeure – offers some guidance on how a business may achieve some relief from obligations that have now become exceedingly difficult due to circumstances not contemplated by the parties at the time of contracting.

Force majeure” – from the French for “superior force” – is a legal doctrine that excuses a party’s nonperformance under a contract when extraordinary events prevent a party from fulfilling its contractual obligations.

Courts considering the applicability of a force majeure clause look to similar elements:

  • whether the event qualifies as force majeure under the contract;
  • whether the risk of nonperformance was foreseeable and able to be mitigated; and
  • whether performance is truly impossible.

The primary focus is on whether the clause covers the type of event that a contractual party claims is causing its nonperformance.  Force majeure clauses are generally interpreted narrowly; therefore, for an event to qualify as force majeure it must be outlined in the clause at issue.

Even if force majeure applies, a party is under an obligation to mitigate any foreseeable risk of nonperformance and cannot invoke force majeure where the potential nonperformance was foreseeable and could have been prevented or otherwise mitigated.  Furthermore, depending on the relevant contractual language and governing law, a party generally will be required to establish that performance is truly impossible rather than merely impracticable. This tends to vary by state; some jurisdictions may only require that performance be impracticable, and some contracts may set a different standard (e.g., performance is “inadvisable”).

Similar to force majeure, The doctrine of impossibility excuses both parties from their obligations under a contract if the performance has been rendered impossible by events occurring after the contract was formed. The requirements for the application of this rule are:

  • The impossibility must be OBJECTIVE; and           
  • Objective impossibility occurs when the performance becomes
    • LITERALLY IMPOSSIBLE
    • for ANYONE because of circumstances beyond the control of the parties.

A frequently used example for law students reads as follows:  X promises to sell Y his horse, but the horse dies before X can deliver the horse. The contract for the sale of the horse has thus become impossible to perform.

A party seeking to use the impossibility defense must prove three things:

  • an unexpected event occurred after the contract was executed;
  • the parties’ agreement assumed such an event would not occur; and
  • the unexpected event made contractual performance impossible or impracticable to perform.

As the Virginia Supreme Court sees it, the law in Virginia follows the view that impracticability should suffice to satisfy the final element:  “Ordinarily, a supervening condition that renders a promisor’s performance temporarily impossible will not release him from the duty of performing, but will only suspend that obligation….  This general rule is inapplicable, however, if the delay will make the promisor’s performance materially more burdensome….  In that instance, the promisor’s duty of performance is discharged rather than suspended.”  (Long Signature Homes, Inc. v. Fairfield Woods, Inc., 445 S.E.2d 489, 491, 248 Va. 95, 99 (1994) (emphasis added).

In sum, force majeure and the doctrine of impossibility may provide a contracting party with a viable defense; however, these defenses present significant evidentiary challenges that require an experienced attorney.  If your business is facing such difficulties, McCormick Law & Consulting is here to help.  Please give us a call to discuss your contract, analyze potential solutions, and assist with the best path forward.  We love working with business owners and entrepreneurs throughout Virginia and North Carolina.

Client Reviews

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  • Being a first time business owner, you want to make sure you're making all the right decisions. Choosing McCormick Law & Consulting, along with Emma and Taylor, made the process so easy! Emma understood right away what my primary concerns were, and was able to execute everything in a very timely manner! She was extremely easy to talk to and she took the time to explain everything to me, settling my nerves with taking this next big step. Taylor made the process of making it all official completely stress free.
    Crystal G.
  • McCormick Law & Consulting was integral in the creation of our non-profit. We promised our 12 y/o son that we would keep fighting cancer for kids like him but we couldn’t have kept that promise without John McCormick and his team. We were hooked at our first meeting when John simply asked “ Tell me about you son.” McCormick Law and Consulting took care of all the legal work while allowing us to focus on our mission. John and his team continue to be a great resource and supporter of D-Feet Cancer The Dalton Fox Foundation. We couldn’t have asked for better legal representation. Thank you McCormick Law & Consulting.

    William F.
  • I definitely could have created my new business, Davis Wealth Management LLC, but boy that would have been a mistake. Because business formation is not an area in which I practice, I had no idea where my blind spots were, and let me tell you there were plenty. The knowledge I received from the firm is invaluable.

    John McCormick and his firm are very reasonably priced and quickly and efficiently assisted me in creating my new business. It was completely turn key; they did everything for me.  I can't recommend their services enough. Also, huge shoutout to Taylor who kept me informed every step of the way!

    James D.
  • I highly recommendMcCormick Law & Consulting! My Father and I live in two separate states and the properties he needed legal services for are in Virginia. I reach out to Taylor on two separate occasions and she was very responsive and professional. The first time we used their services it went so smoothly that by the time I needed their services again I knew I could just send over the necessary documents, pay my invoice and rest assured it would all get taken care of. They eliminated the stress that comes with handling some else's affairs and I so appreciate that.
    Heather C.
  • From the the very 1st conversation with their office it was clear they would be responsive to all my questions and any support with my business. They are relatable and make their customers feel comfortable with any questions and or concerns that might arise while using their services. I am happy to have found them to support me with my small business needs!
    Lisa N.
  • I can't say enough great things about the professional team at McCormick Law & Consulting! We really had no idea of who to trust and who we could count on for quick and professional service in the Hampton Roads area for getting our new business up and running smoothly and the Team at McCormick Law & Consulting really knocked it out of the park with us!
    Jerry G.
  • I had the good fortune of working with McCormick Law on a business sales contract. I sent them the initial draft provided by the buyer along with a few notes about my specific concerns. They carefully went through the document and provided meaningful additions and corrections that better protected my interests. Thanks to Bobby and John for their personalized attention.
    Arthur B.
  • Mr. McCormick and his entire team were amazing! They assisted me in a legal matter concerning a business dispute. Mr. McCormick is highly experienced, ethical, dedicated, and was prepared to fight my legal matter in court if necessary. I thank the entire team for believing in me and would highly recommend them to anyone!!
    Jeanette L.
  • We used McCormick Law to start up another LLC and it was a great experience. I have used other lawyers and attorneys in the past and I experienced delayed responses and it was what I have come to expect.From the first interactions with Robert and his team, I was surprised to how responsive they were. I even mentioned to my new business partner that this was not normal and I was very happy.Needless to say I will be using McCormick Law for all of my business needs in the future.
    Colton S.
  • I utilized this firm for help on a real estate matter. I felt comfortable with the advice I received and am happy to continue doing business with them and referring others to the practice. Everyone I engaged with was welcoming and made the process very easy.
    Christian S.
  • John and his team were great to work with. They provided advice for starting my business and set everything up in an efficient and timely manner. I will definitely recommend them to others!

    Elizabeth H.
  • I contacted McCormick Law firm to register my moving service in NC. They did an outstanding job. Completed the process way sooner than I expected. Thank you, Taylor.

    Steve T.

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    McCormick Law, PC d/b/a McCormick Law & Consulting and Driving Defense Law is a boutique law firm located in Norfolk, Virginia & Raleigh, North Carolina, that seamlessly serves clients throughout Virginia and North Carolina. Whether you are a new or existing client of the firm, McCormick Law, PC, cannot represent you on any new matter until the firm has made a determination that there is no conflict of interest and that it is willing to accept the new engagement. The testimonials on this website reflect the real-life experiences and opinions of our clients. However, the experiences are personal to those particular clients, and may not necessarily be representative of all clients. We do not claim, and you should not assume, that all clients will have the same experience. Your outcome may vary.

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