SUGGESTIONS FOR CONTRACTUAL COVERAGE OF PANDEMIC RISKS UNDER FORCE MAJEURE CLAUSES OF BUSINESS AGREEMENTS – Eshwars
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SUGGESTIONS FOR CONTRACTUAL COVERAGE OF PANDEMIC RISKS UNDER FORCE MAJEURE CLAUSES OF BUSINESS AGREEMENTS

While one may argue that the said Novel Corona Virus situation that has turned into a global pandemic can be treated as a force majeure event that has happened beyond the control of the contracting parties, it may be a good idea to have such pandemic and epidemic situations also defined and specifically carved out as a force majeure event in order to avoid unnecessary disputes and interpretational issues. Accordingly, it is advisable to clearly define the word ”Pandemic” or “Emergency Epidemic”. Suggestive definitions of the same can be as under:

“Emergency Epidemic” means cases of an illness, sickness or condition, affecting living beings, whether communicable or noncommunicable, caused by bioterrorism, pandemic influenza, or any novel and highly fatal infectious agents or biological toxins that has been declared as such by any governmental or regulatory authority.

“Pandemic” means an epidemic disease that occurs throughout a very wide geographical area, usually several countries or continents, and usually affecting a large proportion of the population.

Further, suggestive language of the clauses related to performance excuse owing to Force Majeure events based on the above definitions can be drafted as under:

“Excusable Delays and Force Majeure. Any delay hereunder shall be excused to the extent approved in writing by the parties. Any delay in the performance by either party hereto of its obligations hereunder shall be excused when such delay in performance is due to any cause or event of any nature whatsoever beyond the reasonable control of such party, including without limitation any act of God; any fire, flood or weather condition; any earthquake; any Emergency Epidemic or Pandemic; act of a public enemy, war, insurrection, riot, explosion, terrorist attack or strike; provided, however, that written notice thereof must be given by such party to the other party within thirty (30) days after the occurrence of such cause or event.”

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