Contracts May Be Impacted by Coronavirus Disruptions
As the University undertakes plans for business continuity due to disruptions related to the coronavirus, the Office of General Counsel wants to reach out to our colleagues who manage contractual relationships with vendors and service providers about the potential consequences any such disruptions could have on our contractual obligations and those obligations which are owed to us.
In the event you need to cancel or postpone a planned event or service due to the fallout from the coronavirus, the first step is to look at the language of the contract. Most contracts will include a “termination” section that describes the circumstances under which a contract can be canceled. If the contract you are reviewing does not, or it is not helpful for your purposes, do not despair. Most contracts also include something called a “force majeure” clause, which provide flexibility to parties in meeting their obligations in case of disruption caused by events beyond their control.
Typically, these clauses are written very broadly, so as to contemplate both a wide range of possible complications and a wide range of possible outcomes, from delay to total cancellation. The University’s own form agreements, provided by the Office of General Counsel, are written in such a way. However, the University does often sign contracts with vendors and service providers that are not our own form agreements and may subject us to additional “strings” that could, for example, require written notice of the force majeure condition within a certain number of days or in a certain manner.
We are asking each department to consider what contractual relationships with vendors and service providers it oversees that may be impacted by coronavirus-related disruptions and reach out to the Office of General Counsel to determine whether a termination or force majeure clause applies or if guidance is needed. When you reach out, please be sure to attach a copy of the fully-executed (“final version”) contract at issue and describe your concerns; we also appreciate your patience, as our staff is small and addressing a number of emergent issues. Inquiries should be directed to Lisa Sampson at firstname.lastname@example.org.
We anticipate that most issues that arise will be resolvable through dialogue between the University and the other party to the contract—after all, the coronavirus is prompting disruptions throughout a number of industries and all around the globe. Doubtless there will be challenges. But, the Office of General Counsel is available to assist and answer questions.
Margaret M. Callahan
General Counsel and Secretary of the University