By Shamiso Mangwengwende, Associate

The first part of this article explored the concept of Force Majeure which a party to a contract may invoke in the event that it is unable to perform its contractual obligations due to the occurrence of an unavoidable event. A party may invoke a common law doctrine known as Supervening Impossibility if it is unable to perform due to the occurrence of an adverse event.

Supervening impossibility refers to an unforeseeable and unavoidable event that occurs at the time that performance of a contractual obligation is due which objectively and absolutely makes it impossible for a party to perform in terms of the contract. Unlike Force Majeure which requires that the events be specifically stated in the contract, the supervening impossibility must be unforeseeable i.e. neither party must have contemplated it at the time of execution of the contract. For instance, an economic downturn or recession is generally not considered as a supervening impossibility, the argument being that such an occurrence is usually gradual and can be foreseen in the usual course of business. Such an occurrence is not only foreseeable but its consequences may also be avoidable if the parties take the necessary precautions such as taking out an insurance policy.

In determining if a supervening impossibility exists the circumstances of the case, the nature of the contract, the relationship between the parties and the nature of the claimed impossibility are considered. The impossibility has to be objective and make it absolutely impossible for both parties to continue perform i.e. the contract becomes void because the contract would have become impossible to execute. Hardships or difficulties that are peculiar to a party that make it difficult to perform normally will not be regarded as impossibilities. In the context of Covid-19 any resulting economic hardship resulting from the pandemic may not necessarily be considered as an Impossibility. However, if relevant personnel fell sick or passed away due to the virus resulting in failure to perform then that may be considered as an impossibility.

Impossibility is generally difficult to prove and the courts are not inclined to interfere with private contracts unless the circumstances are compelling. This is because once a party successfully shows that an impossibility exists the other party cannot compel the affected party to perform. This is different from Force Majeure which has specific remedies that are available for the parties to rely on depending on the nature of the clause in their contract.

Ultimately each situation has to be considered based on the circumstances and thorough reading of the applicable contract because Force Majeure and Supervening Impossibility are not opportunities to renege on contractual obligations. Some parties may take it as an opportunity to renegotiate a contract and obtain more favourable terms. Whatever the case legal guidance must be obtained to ensure that parties protect their interests as best as possible in this difficult and uncertain period.

#staysafe #lockdown2020