“Is COVID-19 an ‘Act of God’ in Florida contract law?” has been one of the most popular questions over the past couple of years. As the pandemic continues to disrupt businesses worldwide, it also continues to confuse.
Does COVID-19 qualify as an ‘act of god’? Does it qualify under a force majeure clause, and if it does, what does that mean for your contracts?
In this blog, we’ll take a look at the basic principles of ‘Acts of God’, ‘Force Majeure,’ and how these relate to COVID-19.
Anyone who has a contract which is potentially affected by COVID-19 should speak directly to an attorney before taking any action. Our Florida business contract attorneys and Florida real estate contract attorneys can review the specifics of your situation and advise you appropriately.
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What Is an ‘Act of God’ in Florida?
In Florida contract law, an ‘Act of God’ is an unforeseeable, unusual and extraordinary event caused by forces of nature that cannot be anticipated or expected under normal conditions. For an event to qualify as an ‘Act of God’, it must be the sole cause of non-performance and have been preceded by due care from the involved parties. Common examples of ‘Acts of God’ include weather events such as hurricanes and floods. As COVID-19 has effectively been spread by humans, it may not qualify as an ‘Act of God’. However, in most contracts, it may trigger ‘Force Majeure’.What Is Force Majeure in Florida?
‘Force Majeure’ is similar to an Act of God, as it is a contract clause that excuses non-performance due to unpredictable, unforeseen and unavoidable events. However, it differs as it can include events caused by human actions – such as wars, pandemics and riots. These two statutes are commonly used for similar incidents, but in cases where human intervention is involved, then an ‘Act of God’ may be more appropriate.Is COVID-19 an ‘Act of God’ in Florida?
While COVID-19 has caused state and federal restrictions to businesses and people across Florida, it is still unclear whether it can qualify as an Act of God. Regardless, as Acts of God are required to be the sole event that causes the contract breach, COVID may not qualify.Force Majeure and COVID-19
If you are dealing with a non-performance incident, it is advised to review how the contract defines ‘Force Majeure’.Pandemics
For example, if a contract defines that ‘pandemics’ qualify as ‘Force Majeure’ then COVID-19 may likely be covered.Government Action
However, if it doesn’t, then other terms may need to be included, such as ‘government action’. As our country has experienced shelter-in-place orders, closed businesses and restrictions over the past couple of years, these may have caused hurdles in performances. However, for force majeure to count, government action must have made performance impossible or impracticable – having a direct impact on one’s ability to perform their duties.Catch-All Phrases
If pandemics and government action are not listed as force majeure events in your contract, then there may be a catch-all phrase that covers COVID-19. For example, some contracts include clauses such as ‘any other cause that is not within the control of the seller or buyer. Usually, courts will require specific details for force majeure in the contract. However, given the complicated and unprecedented nature of COVID-19, catch-all phrases may be relevant and solve the answer over “is COVID-19 an Act of God?”What if There Is No Force Majeure Contract?
As many parties desperately scour their paperwork for force majeure clauses, what happens if there isn’t any? Don’t panic just yet. You may still be able to claim impossibility. Courts generally agree that Acts of God qualify contracts impossible to perform.Proactive Drafting to Avoid COVID-19 Issues
Anyone who is currently drafting contracts should clarify how COVID-19 is treated. For example, if you’re buying a house, ensure there is a clause that protects you if you were unable to perform the closing due to COVID-19 restrictions, isolation or other related events. Being proactive in your contract drafting can avoid confusion and allow you to relax knowing COVID-19 incidents are covered. If you wish to have a water-tight contract that protects you, then you can work with an attorney who can correctly draft and amend them in line with the law. Possible suggestions which may apply to your situation are as follows:- Clarify in contracts all potential events that would make a lack of performance an issue.
- Add catch-all phrasing such as “[a]ny other events or scenarios not within the reasonable control of the party affected.”
- Mention government action, natural disasters, viral outbreaks, pandemics, state restrictions and/or positive COVID-19 tests.
- Describe with clarity the impact of full or partial shutdown.
- Spell out the requirement of providing prompt notification of compromising events.
- Spell out how the non-affected party can end the contract if the other claims force majeure.
Recap of: Is COVID-19 an ‘Act of God’ in Florida Contract Law?
- COVID-19 has brought a considerable rise in the number of applications for Force Majeure.
- Cases are complicated and COVID-19 may or may not be considered as an Act of God.
- Force Majeure may be applicable, but this will often depend on the specifics of your contract.
- Judicial decisions may be required.
- Proactive and clear contract drafting that details the impact of COVID-19 and government actions can prevent contract disputes from arising.
- Always speak to a Florida business contract attorney or Florida real estate contract attorney before taking action, making decisions, or finalizing a contract.
