• Robert Spicer

Covid -19 and breach of contract

BREACH OF CONTRACT

It has been reported that lawyers acting for employers are already preparing defences of frustration of contract and/or force majeure, related to the Covid 19 pandemic,in response to breach of contract claims in general, including claims to the ET.

Frustration of contract

The doctrine of frustration of contract means, in general terms, that a contract (including a contract of employment) may be discharged when events occur which make its performance impossible. There is a mass of case law on the effects of illness in relation to impossibility. The current position appears to be that temporary illness does not frustrate a contract of employment. It will only frustrate the contract where it is so serious as to bring an end to the possibility of performance in a business sense, for example by making resumption within a reasonable time a practical impossibility.

Dealing with a frustration defence will involve legal arguments which may pose significant difficulties for unrepresented claimants.

Force majeure

The literal meaning of this is “superior force”. It is a common clause in contracts that essentially frees parties from liability when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, epidemic or an event described as an Act of God for example hurricane, flood, earthquake or volcanic eruption, prevents one or both parties from fulfilling their obligations under the contract.

There is no reported case law on the relationship between force majeure and pandemics or epidemics.

Force majeure does not apply as a matter of general law but depends upon clauses in specific contracts. Contracts of employment do not generally include such clauses, but they may do.

Again, dealing with a force majeure defence is likely to involve detailed legal arguments which will pose difficulties for unrepresented claimant.

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