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Will My Contract Fail Because of Covid-19?

These are unprecedented times and as a result of the current lockdown, there are without doubt going to be contracts that won’t be fulfilled either in part or in whole.

Examples of the types of contracts that might be affected:
Gatherings or wedding bookings
Transport arrangements or bookings
Holiday bookings
Event bookings
Supply of goods and contracts

These are just a few examples but there is no doubt that there will be many contractual fatalities during this period.

What are the remedies for the parties in this situation?

Is the contract frustrated? The legal concept of frustration brings a contract to an end. It does not require any action by either party to end the contract.  

When considering if a contract is frustrated we look at the parties’ knowledge, expectations and assumptions at the time of drafting and preparing the contract and the possibility of any future performance of the contract in the new circumstances. Even though the parties are in lockdown, can they still perform part or all of the contract?

It is important that the event that prevents the contract from being fulfilled occurs after the contract is prepared and signed. The intervening event has to be something that was beyond anything that was contemplated by the parties when they entered into the contract. The event must render any performance or future performance of  the whole of the  contract entirely impossible.

For example, consider if you have purchased tickets to stay in a holiday apartment on the basis that during the day time you will be visiting the Grand Prix and in the evening you will be enjoying a lovely dinner with your husband or wife. Can you argue that the contract between you and the holiday apartment provider is frustrated? Arguably no. Whilst you will no longer be able to enjoy the roar of the engines at the Grand Prix, you will still be able to enjoy a delightful evening with your other half and therefore some part of the contract is still able to be completed.

Now is also the time to review the drafting of your own contracts. What does your contract say about force majeure. Does your contract contemplate that the parties will be released from the contract in the event of a pandemic? Is this the time to review and redraft your standard contract terms.

If you have any questions on any contractual liabilities or the review and redrafting of any contracts, please do not hesitate top contact the litigation team on 01273 582271 or


Posted in: Litigation

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