The language in a business contract is of paramount importance to a contractor’s profitability and success. The current coronavirus pandemic has the potential to cause significant delays in construction projects and other economic factors, affecting productivity and completion. There may be a question of a contractor’s culpability and damages even though the current events are major unforeseeable circumstances, subsequently causing the noncompliance of contractual obligations. Limited travel, large gathering restrictions, quarantine regulations, material shortages due to supply chain problems, and delays are just some of the reasons for the construction industry to be experiencing contractual difficulties and potential legal disputes at this time.
Construction contracts are legally binding agreements between two parties that formalizes all the terms and conditions of a project, including construction start and end dates, labor costs, materials, and many other items. A force majeur is a contract liability clause that is designed to address non-performance such as delays or economic damages due to extraordinary and unforeseen events. It is a proactive measure to have a clearly written force majeur clause in every contract, to protect a construction company from a lawsuit that could result in financial disaster.
A force majeure is applicable for dire circumstances such as:
- Severe disruptions in nature such as floods, fires, earthquakes, hurricanes, or shortages of energy supplies.
- Acts of the government such as changes in laws and regulations that prohibit the work from being completed.
- Labor issues such as strikes and protests.
- War, terrorism, or epidemics.
There are specific requirements that must be met to successfully invoke a force majeur clause. The event must be beyond the control of the contractor and have a causal link to the performance non-compliance. The party that invokes the clause must have evidence that they acted to mitigate the damages, perhaps through searching for other suppliers or other avenues to complete the project. The content of a force majeur in a contract must include the type of event that is covered under the clause. It should include notification procedures and update obligations during an event, for all parties. There should be a provision for the delay or termination rights of both parties following the event.
The Boutty Law Firm, P.A. can Provide Legal Counsel for all Construction Needs
The current coronavirus pandemic is gripping the construction industry and there is no indication as to its long-term impact on the economy. The Boutty Law Firm, P.A., is a multi-service law office that can review, revise, or draft your contracts with the protection of a well written force majeur clause. In the event of a contract dispute, The Boutty Law Firm, P.A. is an experienced construction law office that can protect your interests through negotiations, alternative dispute resolution, or court room litigation in the State of Florida. During these unprecedented times, we will work diligently to find solutions to your legal challenges. Our law firm serves Central Florida and all the surrounding communities. Call our office for an initial consultation at 407-537-0543.