The following brief was released by AIC (agindustries.org.uk) on 17 March 2020:
Corona Virus and Force Majeure in AIC Contracts
With the rapid escalation of events and the call for ‘social distancing’, there have been inevitable questions asked about whether force majeure may be called upon to remove parties from performing their obligations under existing contracts.
At this stage it is clear that what the government is seeking are a series of voluntary measures from people to limit interaction. There are however no legislative restrictions on the movement of goods and, indeed, it would be completely counter-productive for the movement of food and feed materials to be restricted.
It is therefore clear, at this stage, there are no conditions which would permit a valid claim of force majeure to delay the performance of a contract. It is possible that should the Government determine, in the future, that specific restrictions may be required, either regional or national, the issue of force majeure may have to be revisited.
A reminder also that the force majeure clause in the AIC contracts does not trigger an ending of the contract requirements – merely a delay in the performance for up to two further periods (30 days each period) before cancellation of the contract is triggered.
The fact that force majeure does not apply should not however mean that parties should not take every effort to meet the Government call for minimal interaction. This may mean drivers remaining in vehicles whilst loading or unloading takes place. The aim has to be to keep the supply chain functioning whilst taking all appropriate steps to protect employees and minimize the risk of virus transfer.
BRIEFING NOTE ENDS