In business, planning for the unexpected includes possessing insurance and entering into contracts that include “force majeure” provisions. Unfortunately, business interruption insurance in New Jersey does not include coverage for pandemics. While in Trenton is currently being considered to retroactively include Covid-19, as of now, the legislation has not been passed into law.
Without business interruption insurance to cover the unexpected costs of the Coronavirus, for businesses struggling to pay rent, salaries and bills, it is important that businesses reexamine their leases and other contracts to see whether a “force majeure” provision was included. Force majeure is Latin for “superior force” and generally references acts that are completely out of a party’s control, such as a war, terrorist attack or a pandemic.
Covid-19 has forced businesses and restaurants throughout the United States to close and nearly all industries have been impacted by the virus. At this time, businesses should be reexamining their existing contracts to see whether a force majeure provision exists. If so, the provision may allow one party to terminate, or fail to perform without liability, due to recent unforeseen events. Whether you are a landlord or a tenant, a vendor or a vendee, an employer or employee, it is important to know your contractual rights.
If you or your business is affected by the ongoing pandemic and your ability to perform under an existing contract is being affected, it is important for you to examine your contract to determine whether it offers you any protection from liability or risk that your contract may be excused from requiring payment. If you or your business have any questions related to how force majeure may impact your business, the attorneys at Meyerson, Fox, Mancinelli & Conte, P.A. are here to help. For more information, please contact one of our attorneys at 201-802-9202.