Governments have imposed increasingly more extreme containment measures and more restrictive quarantines in response to COVID-19. Contractors and other construction professionals must consider their ability to fulfill their contractual obligations. Lack of workforce, lack of supplies, and lack of certainty are only a few of the challenges that the construction industry is facing.
What is force majeure?
Under Florida of contract law (including the typical construction agreements), a party may not have to perform its contract where performance becomes impossible due to unforeseeable events outside of the parties’ control. These unforeseeable events are commonly called “force majeure” or “acts of God.”
What are typical force majeure events?
What is a force majeure event is controlled by the terms of your contract. Some clauses include a limited list of force majeure events. Some commonly listed force majeure events include natural disasters such as floods, hurricanes, epidemics and quarantines; war; terrorist acts; government action such as eminent domain or changes in laws; and shortages of necessary materials. Your construction advisor can do this analysis.
How can pandemics prevent contractual performance?
Pandemics can cause a variety of issues for construction that ultimately impact your ability to perform your contract. You may face a significant workforce shortage as employees become unable to work due to sickness or quarantine (whether self-imposed by the employees or a governmental body). Workforce shortages in one area can have a ripple effect
Federal, state, and local governments have imposed various containment strategies that will have a trickle-down effect on a contractor’s ability to fulfil its contractual obligations. There will likely be workforce and supply shortages. Contractors may point to these effects as a means to avoid performing their contracts. Whether you can avoid performance depends on the specific language in a force majeure provision in your contracts.
What are my rights?
Much depends on your contract and the specific circumstances impacting your job. One without the other won’t be much help. You need a contract with a definition of excusable delay which includes epidemics such as the COVID-19 coronavirus and you need to have events in place which everyone acknowledges trigger those favorable contract clauses.