Does The Coronavirus COVID-19 Qualify As Force Majeure Under South African Law?
Force majeure refers to an unforeseen calamity or occurrence that places one of the parties to the agreement in an impossible position to perform in terms thereof. It is considered to be an event that the parties could not have reasonably contemplated when the agreement was concluded, and are thus beyond the affected party’s reasonable control.
As the impact of COVID-19 intensifies by the day, companies and individuals’ rights and obligations in terms of agreements, is put under the magnifying glass. Currently, approximately 20% of the world’s population are under some form of lockdown, consequently affecting national and international obligations. This begs the question: “Does COVID-19 Qualify As Force Majeure Under South African Law?”.
In Airports Company of SA Ltd v BP Southern Africa Ltd it was held that where an agreement includes a force majeure clause, such a clause will regulate the impact of the unforeseen event on the performance of the parties. However, where no such clause is included, the common law principle of supervening impossibility will apply.
A force majeure clause is considered to be a suspensive condition, and generally implicates that when such a clause is triggered, the parties’ failure to perform will not result in a breach of the agreement, but such a breach is rather suspended for the duration of the unforeseen calamity.
Due to the variability of force majeure clauses, each agreement will be dealt with in differently. It is however vital to ensure that where an agreement includes a force majeure clause, the terms and conditions thereof is explained to the parties as to enable them to understand their responsibilities and duties should one of them rely thereon.
In accordance with the impossibilium nulla obliatio est principle, where performance as contemplated by the agreement becomes objectively impossible, not because of the affected party’s conduct, but rather as a result of an unforeseen event, the obligation to perform will be extinguished.
The common law position thus states that where the parties find themselves on such footing, both parties’ obligation to perform will cease to exist, subject to certain requirements. No party will thus be entitled to claim damages or specific performance as a result of the non-performance.
Due to the complexity of force majeure clauses, it is highly advised that you contact one of our experienced commercial lawyers in Johannesburg at Burger Huyser Attorneys, to guide you in respect of the impact of force majeure on your agreements.