COVID-19 : Act of God, Force Majeure and Supervening Impossibility of Performance

No question, the lockdown precipitated by the covid-19 pandemic has seen a lot of people hastily trawling through contracts to figure out how to deal with the effect the lockdown in SA is having or is likely to have on their ability to perform their obligations, or sent them (figuratively) scuttling to their attorneys for legal advice.

A good place to start would be distinguish between what are referred to as Acts of God, on the one hand, and force majeure (vis maior), on the other. Whereas Acts of God are considered to be unpredictable natural events such as storms, earthquakes and floods, for example, force majeure is human-initiated action that cannot be predicted or controlled.

Therefore, whilst the covid-19 pandemic would arguably be regarded as being an Act of God, the national state of lockdown is self-evidently human-initiated and would therefore be regarded as constituting a force majeure event.

That said however, and unlike certain European and other counties, no legislative definition is given to the term force majeure although the term is frequently found in contracts, if only to modify the common law position with regard to what is known as ‘supervening impossibility of performance’. It is important to note that regard must first be had to the wording of contracts and whether any such force majeure clause applies, and the extent to which it does.

Should no such clause exist, then one would have to shift one’s focus to the common law doctrine of ‘supervening impossibility’, key to which would be whether and to what extent the alleged impossibility of performance was self-created or alternatively due to someone’s fault. If it was, the doctrine cannot be relied on to avoid contractual liability since its successful application demands that the impossibility be absolute such that it is not possible for anyone else in the same situation to make that performance.

In most cases, therefore, the State-imposed lockdown would be likely to offer a contracting party the opportunity to advance supervening impossibility of performance as a complete defence (or the basis upon which to avoid contractual liability), although it must be made clear that the successful application of the doctrine would need to be based on the facts of each case, the relationship of the parties and the nature of the alleged impossibility.

In conclusion, there is no ‘one size fits all’ solution for anyone who intends to rely on a force majeure clause or on the common law doctrine of supervening impossibility. Each matter must be considered based on its own facts and you are strongly advised to take expert legal opinion before potentially placing yourself in a situation where, having relied on one or other of these, you have painted yourself into a corner and handed the other contracting party an opportunity to successfully treat your non-performance as a repudiation of the contract