March 24, 2020
ALLEVIATING CONTRACTUAL OBLIGATIONS IN THE MIDST OF THE CORONAVIRUS (COVID-19)

Many Floridians are concerned about how the Coronavirus (COVID-19) will affect their ability to pay long term debts and honor long term contractual obligations.  There is little doubt that the economic impacts of this epidemic are vast and will continue to accumulate.  Furthermore, the Sunshine State is particularly vulnerable because of the economy being so heavily driven by tourism and hospitality.

If you are one of the many people that are now financially in over your head due to the economic effects of Coronavirus (COVID-19) or are concerned that you may get to that point, The Doctrine of Impossibility of Performance may provide some relief.  Generally speaking, “[w]hen an unexpected event completely deprives the parties of an essential precondition to their performance, the contract may be declared dissolved and the parties relieved from further performing it. Such an event is typically a permanent loss of use or destruction of the equipment necessary to perform.” Hilton Oil Transport v. Oil Transport Co., S.A., 659 So. 2d 1141, 1147, 1996 A.M.C. 113 (Fla. 3d DCA 1995).

“Three elements are normally necessary for application of the doctrine of frustration or commercial impracticability: first, the event giving rise to the claim must be totally unexpected and unforeseeable; second, the risk of the event must not be provided for, either by the language of the charter party or by custom; and third, the performance of the contract must be impossible or commercially impracticable.” Id.

The law will generally consider an epidemic like the Coronavirus (COVID-19) to be an “Act of God” that was both unforeseeable and outside of the control of parties to the contract.  This will likely satisfy the first element.  The latter two elements are usually determined based on the specific facts of the case. It is important to also note that the laws governing property agreements, service contracts, and contracts for the sale of goods can vary greatly and can be subject to different standards.  However, overall The Doctrine of Impossibility of Performance does exist as an equitable remedy to potentially provide relief to parties facing unexpected hardship. 

Notwithstanding the widespread effects of this pandemic, every contract and situation is unique. It is important that you obtain the advice of an experienced attorney who can analyze whether COVID-19 and its effects may relieve you from certain of your obligations.

If you would like more information on potentially alleviating your contractual obligations in the midst of the Coronavirus (COVID-19), The Boatman Law Firm is here to advise and assist you.  The attorneys at The Boatman Law Firm can help you protect your rights and property. Contact us today to schedule an initial consultation at (239) 330-1494 or info@boatman-law.com.

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Published: March 24, 2020
Author: The Boatman Law Firm
Categories : Uncategorized