Your Contracts and Covid-19: Force Majeure And Impossibility



COVID-19 is rapidly impacting much of our society and our economy, and your business may be hard pressed in the near future. Some businesses are reeling from the impacts of forced closure, and many others may soon be impacted by supply chain and labor issues as the workforce adjusts to living in the time of pandemic.

The real estate and construction industries are already feeling the impact, and clients are facing several questions. How will COVID-19 impact your tenants? What will be the impact on your construction projects? Is there any relief for your businesses ongoing obligations in light of a severe slowdown, or possibly a forced shutdown.

Carrington Coleman is working to alert our clients to many the legal issues that will arise as a result of the current crisis. This alert addresses “force majeure” clauses, which are common in many contracts, including those involving real estate such as construction contracts and leases. Many contracts may lack these clauses, but Texas recognizes the concepts of “frustration of purpose”, “impossibility of performance”, and “commercial impracticability” to excuse performance when it becomes impossible.

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