Can you cancel a contract because of COVID-19?
Yes you can if it is objectively impossible to perform your contractual obligations and even in the absence of a force majeure clause in the contract. Importantly, each situation will depend on its own facts and the wording of the contract. Also, in the
COVID-19 crisis specifically, developments must be considered carefully before concluding that there is an impossibility of
performance or the triggering of a force majeure clause. Claiming impossibility or force majeure incorrectly could be a breach of contract and could give rise to a damages claim against you. In particular any impossibility of performance must be absolute and it is any event, including COVID-19 and its consequences, that could bring about an impossibility or force majeure provided it is unforeseeable with reasonable foresight, unavoidable with reasonable care and not the fault of either party.
A force majeure clause in a contract will take precedence over the common law and care must be taken to comply with any agreed time limits or process requirements set out in the contract.
The information and material published on this website is provided for general purposes only and does not constitute legal advice. We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter. We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages. Please refer to our full terms and conditions. Copyright © 2024 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com.
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