affect of ability to perform due to cov-19

The global disease known as covid-19 has had a huge impact on the legal system. T
he issue that arises here is whether the covid-19 outbreak can be considered as a fo
rce majeure event? According to the definition of force majuere that has been discus
sed earlier, the words ‘pandemic’ , ‘epidemic’ and ‘disease’ should be sufficient to cat
egorize covid-19 as one of a force majeure event as the situation changed quickly an
d it was something unforeseeable that a disease can give such impact to the whole
world. After all, whether the covid-19 outbreak can be considered as a force majeure
event depends on the force majeure clause's scope in the contract.

If the words ‘disease’, ‘outbreak’ ‘global health emergency’ are included in the contra
ct, covid-19 can be considered a force majeure event. It would be easy if those word
s were clearly stated in the force majeure clause in the contract because the clause i
s wide enough to include covid-19 as one of them. Besides, if the parties intended to
list such clauses as non-exhaustive, it can be difficult to argue since the parties will s
et out specific events which only will be included. In the case of Global Destar (M) S
dn Bhd v Kuala Lumpur Glass Manufacturers Co. Sdn Bhd [2007] MLJU 91 whe
re the court held that the word ‘depressed economy’ did not come with the words ‘oth
er circumstances’ in a force majeure clause because the ups and downs of the econ
omy are a part of the risk in doing business. This view was confirmed by the Court of
Appeal in Malaysia Land Properties Sdn Bhd v Tan Peng Foo [2014] 1 MLJ 718.

On the other hand, If they list out the words ‘act of gods’ in the contract, it is arguable
that the outbreak is one of the acts of gods because it is only available when natural
forces caused the intervening events without human intervention and which is unfore
seeable and could not have been avoided by any act of reasonable care. What if ther
e are no words or phrases construed in the force majeure clause in the contract, sho
wing that the parties intended that such events will be covered? In such case, the co
urt will examine the underlying purpose of the contract and see whether the contracti
ng parties have been taken steps to mitigate the situation before the court can allow t
he defaulting party to invoke the force majeure clause (Crest Worldwide Resource
s Sdn Bhd v Fu Sum Hou and Ors [2019] MLJU 512, HC).
To conclude, covid-19 can affect the ability of the parties to perform their obligations
under the contract by way of frustration. Whether the force majeure clause is wide en
ough to cover the covid-19 outbreak will be determined further by the court by lookin
g at the words included in the clause and force majuere does not construe in isolatio
n but along with the whole provisions in the agreement. That is the reason why the c
ourt will also examine the purpose of the contract.