Fortuitous Event / Force Majeure

The principle of force majeure provides that no person shall be responsible for a fortuitous event,
i.e., events which could not be foreseen or which, though foreseen, were inevitable. This may refer
to natural occurrences such as floods or typhoons, or an "act of man," such as riots, strikes or wars.
Aside from the event being one that is unforeseeable or unavoidable, the following must all be
established:

 The cause of the breach of the obligation must be independent of the will of the party
seeking to be released from the obligation
 The event must be such as to render it impossible the fulfillment of the obligation in a normal
manner
 The party seeking release must be free from any participation in or aggravation of the injury
to the other party.

No liability attaches notwithstanding a contractual breach when these requisites are present. The
exceptions are: (a) when the law expressly so specifies, e.g. a possessor in bad faith is liable for
deterioration or loss of the thing possessed despite a fortuitous event; (b) when it is otherwise
agreed by the parties, i.e. by contractual stipulation; and (c) when the nature of the obligation
requires the assumption of risks, e.g. business risks that may be inherent in the nature of the
business.
The scope of what constitutes force majeure may be contractually expanded or limited by the
parties. Therefore, companies should (a) review the force majeure clauses of their contracts (b)
assess their exposure under such clauses; and (c) determine whether there is a need to revisit or
renegotiate the same to protect their interests.
Whether a party may invoke force majeure in the context of COVID-19 will ultimately depend on
surrounding factual considerations, including: (a) the particular actions taken by the parties (e.g.,
mitigation measures); (b) the nature of the obligations involved; (c) the stature or level of expertise of
the parties; (d) the nature of the subject matter of the contract; (e) the business risks assumed by the
parties, if any; and (f) the damages or disadvantages arising from the material event.