Change in Law Clauses and Force Majeure in COVID-19

    View Author April 2020

    Change in law clauses might be more appropriate and useful than force majeure in certain contracts affected by the coronavirus disease 2019 (COVID-19) restrictions. The wording of the particular clauses in the context of the particular contract is all important. The intersection of change in law and force majeure could produce interesting results.

    Typical force majeure clauses excuse non- or delayed performance due to events beyond the party’s control, usually including governmental action. Change in law clauses typically enables a contractor to recover the increased cost, and the principal to recover the decreased cost, in performance due to a change in law. Depending on the definitions, governmental action in the force majeure clause may be the same as a change in law under that clause, or they may be different. Even if they are the same, the effects might be different and the force majeure clause might encompass the effects as well the cause.