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Have you entered into a contract – for example a real estate development agreement – which is subject to a “force majeure” provision?

If so, you may now want to revisit the provision to see whether COVID-19 is one of the “force majeure” events which could allow a party relief by suspending the performance of obligations under the contract.

Most clauses of this type may not, to date, have expressly specified pandemics and quarantines to be “force majeure” events. This, no doubt, will change in contracts going forward.

Notwithstanding the absence of express mention of pandemics and quarantines, there may be a “catch-all” provision which based on the plain and ordinary meaning of the “force majeure” clause and the purpose of the contract, could (within reasonable limits and subject to establishing impact) extend the “force majeure” events to the unique circumstances surrounding COVID-19.

Should you require specific advice on this point, please do not hesitate to contact Higgs & Johnson. Our Firm is located in both the Cayman Islands and The Bahamas, but our reach is much further through our TerraLex membership. Should your contract be governed by a law other than the Cayman Islands or The Bahamas, we would be happy to seamlessly arrange an introduction to our TerraLex colleague in that particular jurisdiction.

The information contained in this article is provided for the general interest of our readers, but is not intended to constitute legal advice. Clients and the general public are encouraged to seek specific advice on matters of concern. This article can in no way serve as a substitute in such cases. Copyright ©2020 Higgs & Johnson. All rights reserved.

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