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Does COVID-19 constitute a Force Majeure?

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Nasser Alkaabi Project Manager Dammam, Eastern, Saudi Arabia
Maybe many of you have gone through contractual terms and obligations to review and close some projects "healthy & safely" but never had to discuss these terms again (great!)

Does COVID-19 now constitute a force majeure in your country or region? do you think it should?
Do you think it matters if the contract was signed before, during, or after the virus spread and becomes a global crisis
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Peter Rapin Subject Matter Expect; Project Delivery| Independent Consultant Ontario, Canada
Apr 23, 2020 10:54 AM
Replying to Nasser Alkaabi
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That's right Peter, the contract doesn't address the pandemic
The government did't say per se its illegal, but you can't have your resources under your control.
There are two key considerations successfully claiming Force Majeure in a contractual context: 1) that the event and its effect could not have been predicted by the parties to the contract at the time of signing the contract, and 2) that the party claiming Force Majeure has no means of avoiding or managing the event - outside of your control.

However, as I stated before, the remedy available even if Force Majeure is successfully argued is typically limited to a time extension.
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1 reply by Stéphane Parent
Apr 24, 2020 12:33 PM
Stéphane Parent
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As many of us saw, some insurance companies refused to honour trip cancellations if the travel insurance was purchased after countries had informed their citizens to not travel.
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Stéphane Parent Self Employed / Semi-retired| Leader Maker Prince Edward Island, Canada
Apr 23, 2020 1:49 PM
Replying to Peter Rapin
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There are two key considerations successfully claiming Force Majeure in a contractual context: 1) that the event and its effect could not have been predicted by the parties to the contract at the time of signing the contract, and 2) that the party claiming Force Majeure has no means of avoiding or managing the event - outside of your control.

However, as I stated before, the remedy available even if Force Majeure is successfully argued is typically limited to a time extension.
As many of us saw, some insurance companies refused to honour trip cancellations if the travel insurance was purchased after countries had informed their citizens to not travel.
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1 reply by Peter Rapin
Apr 24, 2020 4:31 PM
Peter Rapin
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The insurance companies are no doubt arguing that the buyer had been made aware of the risk and thus took the risk of cancellation. There are two avenues for lawsuits here" 1) against the insurance company claiming that the cancellation risk stayed with them - they were aware, even more so that the buyer, and 2) against the travel company for having sold a product that they knew was at risk - as with the insurance company the travel firm was aware of the risk even more so than the buyer. I believe the insurance companies are refusing to compensate counting on the governments to pick up the tab. It will take years to sort all this out.
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Peter Rapin Subject Matter Expect; Project Delivery| Independent Consultant Ontario, Canada
Apr 24, 2020 12:33 PM
Replying to Stéphane Parent
...
As many of us saw, some insurance companies refused to honour trip cancellations if the travel insurance was purchased after countries had informed their citizens to not travel.
The insurance companies are no doubt arguing that the buyer had been made aware of the risk and thus took the risk of cancellation. There are two avenues for lawsuits here" 1) against the insurance company claiming that the cancellation risk stayed with them - they were aware, even more so that the buyer, and 2) against the travel company for having sold a product that they knew was at risk - as with the insurance company the travel firm was aware of the risk even more so than the buyer. I believe the insurance companies are refusing to compensate counting on the governments to pick up the tab. It will take years to sort all this out.
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Nasser Alkaabi Project Manager Dammam, Eastern, Saudi Arabia
As a rule of thumb, I think the buyers can refund their bookings as long as the flight cancellation is coming from the airlines

What if all parties refused to process the refund, can you request your credit card company for example to take an action!
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Collins Aluga Quantity Surveyor| MCK Contract Services Ltd Nairobi, Nairobi, Kenya
COVID 19 falls under force majeure.Most contracts do not stipulate events that fall under force majeure per se so it doesent matter whether the contract was executed before or after COVID spread.It has to be dealt with prudently and proactively by the project manager to avert possible loss and expense that may latter turn out to be claims from various parties that may also subsequently result into disputes.Contracts are agreements entered freely by parties and mutual negotiations to arrest any negative covid effects can be discussed and agreed upon.
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