Page 16 - issue 28 2020

16 News

Contractual obligations in

the wake of Covid-19

by : Farai Nhende
that lies at the heart of most if not all This is often termed force majeure.
he effects of Covid 19, have commercial business ventures. Can Covid 19 be considered force
undoubtedly been wide, far Yet the reality is that there are a majeure?
Treaching and cross cutting through plethora of factors that can militate The question that often arisen with
the different facets of our lives. The against the realisation of this ultimate greater consistency in the recent
consequences have been dire and in business objective. And yet because past is whether Covid 19 can aptly
some instances downright catastrophic. business is alive to the fact that to the be considered as constituting force
This article is alive to the myriad of risks and liabilities that can arise in the majeure. The truth is that there are
problems that have been presented by exchange of goods and services, parties no hard and fast rules in determining
Covid 19, however, the author of this to significant business transactions this question. A lot will depend on the
piece has deliberately chosen to narrow often try to mitigate their risk exposure conext and specific circumstances of
the focus of this article to the legal through the use of contracts. each case.
problems that have been presented
within the spectrum of the regular run Contracts by their very nature govern the For Covid 19 qualify to pass the
of the mill business transactions and conduct of either party to a transaction, test of force majeure, the following
operations, particularly with regard to often setting out the terms, conditions requirements have to be established;
failure to fulfill contractual obligations and or obligations of either parties. i) there has to be a supervening act the
as a direct consequence of Covid 19. renders the performance of contractual
Yet even these contracts are oftentimes obligations impossible or impractical
Commercial businesses by their not foolproof in themselves. And ii) the supervening act has to have
very nature are largely formalistic even when they are, they still have to occurred after the agreement has been
organisations that are run within certain interpreted within the context of the entered into
clearly defined parameters with a operating environment. For example iii) the act has to occur outside the
view to creating a viable and enabling what happens on circumstances where independent will of either party
economic environment conducive to there is a supervening act or event that iv) the supervening act has to be of such
the realisation of profit as the end goal. renders the performance of contractual a nature that it would not have been
Making profit is ultimately the target obligation impractical or impossible. objectively foreseeable
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