Frustration And Pandemic - A Long Term Perspective On COVID-19 And Frustration Of Contracts

In these times of global health uncertainty and economic troubles it is tempting to jump to the "frustration of contract" conclusion. While we acknowledge that it is tempting to see the current economic trouble as frustrating the performance of contract there are a number of factors that must be considered when undertaking an analysis to determine if a performance of a contract has been frustrated as a result of the COVID-19 global pandemic. In some case, such as sit-down restaurants, it is difficult to imagine frustration not applying when there is little flexibility in running the business. However, the analysis is much complex given the potential and unknown possibilities for remote work in other industries.

Force Majeure and Frustration

Force majeure and frustration are often confused with one another. While there is some overlap between the two, they are distinct.

In order for force majeure to apply, a specific provision must be contained in the contract. Force majeure clauses provide that parties to a contract may be...