Page 18 - issue 28 2020

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that give effect to the intention of the returning to the position they would
So if the peculiar circumstances of the parties involved, this would be the have been had they not entered into the
contractual agreement are such that easier and more practical way of solving agreement.
they satisfy the above requirements, the problem. Insuring the business against force
then Covid 19 may in such circumstances majeure (act of God/ superior or
be safely declared Force Majeure. b) Cancellation of contract irresistible force)
Cancellation or termination of contract
Oftentimes, where such case is is also another competent remedy. Force majeure in short refers to
established, even in circumstances At this point the termination of the a superior force, because it is the
where the contract has no clearly agreement is one practical solution occurrence of events that nobody could
spelt out force majeure clause, courts of dealing with the situation where reasonably or objectively foreseen or
are likely to read it in through the impossibility of performance has arisen. stop from happening. In our regular and
invocation of the doctrine of frustration By cancelling the contract, either party everyday parlance, it is what we would
of performance. is absolved of the obligation to perform. refer to as "an act of God".

In instances where force majeure has c) Restitution However, despite the fact that this is
been pleaded and it's requirements This is another competent remedy that an event that one cannot predict of
duly satisfied, the consequence of such can be invoked in circumstances where objectively foresee, it is a phenomena
a plea will be to suspend performance. rigid adherence to the set contractual that one can nonetheless insure his
The ensuing part is a discursive attempt at obligations would lead to absurdity. business against. On account of the
balancing, managing and or reconciling relationship between the business and
the competing expectations or interests A simple example would be a situation it's proprietor as well as the existing
of either parties in circumstances where where A agrees to hire out certain financial relationship, one can easily
it has become apparent that there is construction equipment to B for X establish an insurable interest in the
need to suspend performance. amount of days. B pays $10 000 being part of the owner.
the equivalent amount for X number
The suspension of the obligation to of days. However, before the project Since there is a readily establishable
perform is an acknowledgement of can commence, the country is plagued insurable interest, this means that
the fact that performance has become by a mysterious and highly infectious the business can be insured against
impossible or impractical as a direct deadly virus. The government declares potential loss of revenue which may be
consequence of an occurrence that is a lockdown to attempt and contain occasioned by force majeure. Some of
beyond the control of either party to the virus. The agreed number of days the more common insurances against
the agreement. At this point, a lot will within particular marked dated expires. this phenomenon are instances where
depend on whether the failure to meet A demands his equipment back on the individuals for example seek to cover
the performance obligation is curable. premise that the agreed time has passed themselves against possible damage
despite having full knowledge that B has that may be occasioned by such factors
Some of the common remedies are; not been able to use the equipment and such as hurricanes, typhoons, tornados,
a) Extension of set timelines the prevailing situation has not been cyclones, floods etc
Where a contract has been entered permissible for use of the same.
into for the provision of certain services So next time you are thinking about
within set timelines and there is an Under the particular circumstances set signing that big contract, it might be a
intervening event or phenomena which out in the above illustration, the parties good idea to insist on an express force
renders performance impossible or to the contract can resolve the stand off majeure clause. And the next talk with
impractical within the agreed timeframe, by adopting any of the above remedies. your insurer might as well touch on
one competent remedy would be to They can extend or reset the timelines your business insurance against force
review the terms of the contract with so that B makes use of the equipment majeure.
a view to extending or adopting more at such a time as the prevailing might
flexible and practical timelines. become conducive.

Where both parties are rational and are In the alternative, they can simply elect
agreeable to the adoption of changes to cancel the contract and restitute each
other. Restitution in this sense connotes engineerbw.com

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Issue 28 - Dec/Jan 2021
Issue 28 - Dec/Jan 2021 www.engineerbw.com