Much has been said in recent weeks regarding contracts which cannot be performed as a result of action taken in response to the novel coronavirus – COVID 19. A number of clients have asked whether the pandemic is a justifiable reason for breaching a contract, and whether the breaching party would be held responsible as a result.
The answer will depend on the terms of your contract. Most commercial contracts contain what is known as a “force majeure clause”. Force majeure (which is a French term) or vis major (the Latin) is directly translated as “superior force” and applies when a party to a contract cannot perform due to extraordinary circumstances which are beyond their control. Such clauses often also include provisions relating to casus fortuitus being “chance occurrences”. The defence of force majeure is an extraordinary one, and the courts are reluctant to apply the same, save in very limited circumstances. In the case of Firstel Cellular (Private) Limited v NetOne Cellular (Private) Limited  ZWSC 01, our Supreme Court held that:
- “It is trite that the courts will be astute not to exonerate a party from performing its obligations under a contract that it has voluntarily entered into at arm’s length. Thus, the suspension of a contractual obligation by dint of vis major or casus fortuitus can only be allowed in very compelling circumstances. The courts are enjoined to consider the nature of the contract, the relationship between the parties, the circumstances of the case and the nature of the alleged impossibility. See Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe 2006 (1) ZLR 9 (S) at 14B-F”.
Similarly, in Chinyakata v Crystal Cabs & Another  ZWHHC 660 it was held that:
- “As a general rule impossibility brought about by vis major or casus fortuitous will excuse performance of a contract .But it will not always do so. In each case it is necessary to look to the nature of the contract, the relation of the parties, the circumstances of the case, and the nature of the impossibility invoked by the defendant, to see whether the general rule might, in the particular circumstances of the case, to be applied. The rule will not avail the defendant if the impossibility is self-created; nor will it avail the defendant if the impossibility is due to his or her fault”.
It would therefore be necessary to examine the contract, and the rights and obligations of the parties to determine whether a force majeure clause could be relied upon as a defence in respect of non-performance of a contract. For example, if the contract required physical attendance at a work site, and the government in question passed a law setting out that non-essential business were to be closed, with people not being allowed to leave homes – such is the case in South Africa, Italy and China amongst other countries, in that event a force majeure clause could be relied upon. If, however, a person was anxious and did not want to come into their office, with no lock-down having been declared, then in that event, a force majeure defence would likely not succeed.
In the event the contract does not contain a force majeure clause, the defence cannot be invoked. As set out by Conor Maher:
- “Because there is no general doctrine of force majeure, the law is clear that no term will be implied into a contract which does not contain an express provision to this effect. Equally, the precise wording of the term is vital to establishing whether the clause will apply to an event, and what constitutes a force majeure, an ‘Act of God’, or a ‘vis major’ will often be expressly qualified” .
It may be possible for a person in the above circumstances to raise a defence of supervening possibility, based on the COVID 19 pandemic, but the same general principles would still apply. In the case of Watergate (Pvt) Ltd. v Commercial Bank of Zimbabwe  ZWSC 70, it was held that:
- “When the Court has to decide on the effect of impossibility of performance on a contract, the Court should first have regard to the general rule that impossibility of performance does in general excuse the performance of a contract, but does not do so in all cases, and must then look to the nature of the contract, the relation of the parties, the circumstances of the case and the nature of the impossibility to see whether the general rule ought, in the particular circumstances of the case, to be applied. In this connection regard must be had not only to the nature of the contract, but also to the causes of the impossibility. If the causes were in the contemplation of the parties, they are generally speaking bound by the contract. If, on the contrary, they were such as no human foresight could have foreseen, the obligations under the contract are extinguished”.
In both circumstances, the impossibility or unforeseen condition must be “objective and absolute” (see Watergate supra). This may raise various issues as to what is considered impossible. For example, if a person did not want to change a flight due to potential loss of funds, and therefore was unable to perform a task, or if a person had to travel back to their place of birth due to their work or university being shut, or due to the closure of borders, such circumstances would not be considered to amount to absolute impossibilities, and the contract would remain binding.