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Ruling that COVID-19 is a Natural Disaster Affects Business Contracts

April 20, 2020

By Richard A. Monti, Esquire

In a ruling that will have wide-ranging effects on business contracts and insurance policies, the Pennsylvania Supreme Court ruled last week that COVID-19 is a “natural disaster.”

While the definition may seem superfluous, it may have a big impact on “force majeure” clauses in contracts. As Rothman Gordon has previously explained, force majeure is French for “superior force.”

A force majeure clause in an agreement excuses performance of a contract when one or both parties cannot perform due to circumstances outside the control of the parties. Many force majeure clauses include the term “natural disaster” as a reason for invoking the clause.

During this chaotic time, it is important for business owners to know and understand the language in their contracts, and specifically their force majeure clause. These clauses can sometimes be hard to decipher.

The business lawyers and litigation lawyers of Rothman Gordon are available to review and advise you regarding this or any other business concern you may have about the Coronavirus.  Contact us online or call (412) 338-1100. Stay healthy and safe!

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