Florida Business Lawyers Blog
No business, neither big nor small, has proven to be immune to the rapidly increasing threat of the coronavirus (COVID-19) that has significantly disrupted commercial operations all over the globe. In response to this pandemic, public and private enterprises have implemented procedures to slow the spread of the coronavirus, including closing facilities and ceasing operations. As a result, businesses are now evaluating their options concerning performance of their contracts. Accordingly, it is critical for these businesses to be aware of the various defenses available to potentially excuse nonperformance of their contractual obligations in these uncertain times. One of these defenses is to invoke a force majeure clause contained in a contract.
A force majeure clause in Florida is a standard contractual clause that permits parties to allocate the risk of loss if performance becomes impossible or impracticable due to “force majeure events,” such as acts of God, hurricanes, earthquakes, epidemics, terrorism, government acts, labor strikes, and lock-outs, among other things. The Florida Supreme Court, in holding that a hurricane constituted and act of God excusing a party’s performance under a contract, defined such an act as follows:
An act of God, such as will excuse nonperformance of a legal contract, must be an act or occurrence so extraordinary and unprecedented that human foresight could not foresee or guard against it, and the effect of which could not be prevented or avoid by the exercise of reasonable prudence, diligence, and care or by the use of those means which the situation of the party renders it reasonable that he should employ.[1]