C OV I D -19
What is your legal framework during COVID-19? The pandemic has impacted almost every aspect of our daily lives and forever changed our perception of stability and future certainty. By Christine van Zyl
N
o other event in recent history has highlighted the fragility of our normal way of living, thinking and doing business quite like this global pandemic has. It has disrupted global supply chains and local industries alike. Lockdowns have been imposed in various countries, to various degrees. The South African government has imposed a strict lockdown during which only essential services may be rendered and essential supplies manufactured and delivered. Due to the lockdowns, parties who had entered into contracts to render certain services or provide certain deliverables before the start of the pandemic now suddenly find themselves in a position where performance has become impossible. The South African and global lockdowns and subsequent effects thereof on business relationships and deliverables has brought two legal aspects sharply into focus, that of supervening impossibility to perform and force majeure clauses in many contracts. How will these two principles alleviate the impact on your business?
WHAT IS A FORCE MAJEURE? It is an event giving rise to impossibility
unforeseeable with reasonable foresight
contract does contain such a clause but
and unavoidable with reasonable care.
the wording does not allow its application to the specific event, parties can rely on
FORCE MAJEURE CLAUSES
the common law principle of supervening
Inclusion of a force majeure clause in a
impossibility to perform. This principle is
contract has the effect of removing the
relied on if a specific event has made it
so-called unforeseeability of an event.
impossible for the parties to fulfil
It may remove or alleviate the liability
their respective obligations.
for damages as a result of breach of
It is important to note that the
contract due to the impossibility to
impossibility to perform must relate
perform on the occurrence of a specific
to the actual contractual obligations,
event. Depending on the wording of
the event causing the impossibility
such a clause, it could suspend the
must be unforeseen and occurs after
legal obligations of the parties for a
conclusion of the contract. Our law
specific period, and allow a party to
allows the extension of this principle to
elect to cancel a contract, should the
legislative changes that were introduced
impossibility to perform extend beyond
subsequent to the conclusion of the
the agreed period.
contract and which have the effect of
One must be careful of simply relying
The enactment of the directives and
to suspend legal obligations. This is
regulations under the auspice of the
because our law places strong emphasis
Disaster Management Act could qualify
on the sanctity of contract and the
as such a legislative change.
wording of the force majeure clause will
In short, a business may rely solely on
determine whether the event obstructing
its contractual terms or on the common
performance falls within the parties’
law principle to navigate these difficult
intention of what they had defined as a
times, but it is important to review and
force majeure. The courts adapt a strict
formulate an approach carefully in order
interpretation of the parties’ intentions
to avoid liability. If nothing else, now is
and a vaguely worded force majeure
the best time to review your contracts
clause may not have the effect of
and make provision, as far as possible, for
relieving parties from their obligations.
an unforeseen event like COVID-19. •
of performance and can be either an act
SUPERVENING IMPOSSIBILITY
of God (natural causes) or man (human
Should a contract not contain a force
agency). The event is something that is
majeure clause, or alternatively where a
C C
rendering performance impossible.
on a force majeure clause in order
Christo Coetzee Attorneys – www.christocoetzeelaw.co.za
Christo Coetzee Attorneys We are not just lawyers, we are part of your business and can assist you in the following areas: • Labelling and advertising compliance • Regulatory compliance • Commercial law • Contracts • Litigation
Christine van Zyl: BSc (Hons.) Biochemistry, LLB, Diploma Cosmetic Chemistry
Tel: 012 342 1930 | Email: office@christocoetzeelaw.co.za | Website: www.christocoetzeelaw.co.za
April 2020 | Food Review
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