COVID-19 second wave leading to breach of contract cases  

business contract

(© Elnur – stock.adobe.com)

The COVID-19 pandemic has captivated the attention of the entire world, leading many to wonder if the changes they are seeing in their lives will last forever. At the same time, some people are claiming that the worst of the pandemic might be in the rearview mirror. Sadly, it appears that this is not the case. There is a second spike that is taking place in new hot spots across the country including CA, AZ, and FL. Some people are wondering if these spikes are going to lead to a second lockdown. If so, some businesses might not surprise.

Indeed, many in the legal field are already postulating that breach of contract cases might start to be filed. If this second wave gets much worse, these cases might become more common. There are several reasons why a breach of contract case might be filed. First, a breach of contract case might be filed by a business against its supplier. This case might be filed because the supplier is unable to meet the demands of the contract. Maybe they have been forced to shut down by the government or perhaps they cannot get the materials they need from overseas. These could be some of the most common reasons why a supplier might struggle to meet the terms of the contract.

On the other hand, it is also possible that a breach of contract case might be filed in the opposite direction. This could take place if a business is unable to pay the supplier for the goods and services they have received. Of course, there are reasons why a business might not be able to pay the supplier. These could include rising overhead costs, being forced to lay off employees, or a revenue stream that has dried up due to the business being closed by the government in a state of lockdown.

In both of these cases, there could be something known as a force majeure clause that might be invoked. In a breach of contract case, a force majeure clause is a clause that prevents the aggrieved party from seeking remuneration under the terms of the contract because of a cause or problem that was not foreseen. This could include pandemics or shifts in government regulations. As a result, this clause could end up playing a major role in a breach of contract case in the future. It will be interesting to see what happens next.

These are just a few of the most common reasons why a breach of contract case might be filed in the wake of the pandemic. It is important for everyone to read the contract carefully to see if it contains a force majeure clause and what has to happen in order for this clause to be invoked in a breach of contract case.


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