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Force Majeure and Avoidance of Contracts: A Deep Dive into Contracts Going Wrong in times of Covid-19

This short course takes a deep dive into how companies are trying to avoid suddenly burdensome contract obligations since the onset of Covid-19.  Whether they are rental agreements, employment agreements, or even merger agreements, everything in business has changed since March 2020.  Businesses in all jurisdictions and all sectors are scrambling to modify and even completely undo their contractual commitments.  But, although contract avoidance mechanisms can work, it’s not always easy for clients to avoid their obligations.

We will first look at standard force majeure clauses and cases involving them:  How are courts (mainly in the US, but also in England and elsewhere) going to treat these?  How did they treat such cases in the past, for example in the Ebola or SARS pandemics?  When is an obligation completely avoided rather than merely postponed?  How we can draft clauses more effectively to cover the pandemic today?  What can we expect in our own disputes?

We will examine the common law doctrines of impracticability, impossibility and frustration of purpose, as well as the civil law hardship doctrine. What are they all, and how do each of these differ?  How do the same concepts differ among jurisdictions? Can they rescue the client when there is no applicable force majeure clause?
We also will explore other avoidance mechanisms lawyers are using, such as MAC clauses, making claims under BITs, or deeming property unfit for use.   And of course, we will look into related issues such as how parties deal with the obligation to mitigate losses.

The course will be directed by Dean Marian Dent,  but she expects to bring in guest lecturers with expertise from multiple jurisdictions.  The course is one credit, on Zoom, credit-no credit, with no exam.  Credit will be based on attendance and participation online, and completion of course homework and group exercises.

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