Nov 19th, 2020
Ideas Labour Law The COVID-19 crisis and superior force: it is urgent to review your rights and obligations
Mar 16th, 2020
By Laurent Debrun
In Quebec, superior force is defined at article 1470 of the Civil Code of Quebec (“CCQ”):
Superior force is an unforeseeable and irresistible event, including external causes with the same characteristics.
According to the second paragraph of article 1470, CCQ, an incident or a crisis must simultaneously be unforeseeable and irresistible to be considered a case of superior force.
If at the time of making a contract the parties were unable to foresee a particular event, that event will probably be considered unforeseeable. However, the test is: would a reasonable person have been able to foresee the event.
The irresistible nature of an event refers to the issue of the skill of a person to take reasonable measures to avoid an event occurring. The notion of “irresistible” means that the event in question makes it absolutely impossible for the debtor to execute its obligations. Where the debtor can still execute its obligations, but it is more onerous or difficult to do so, the condition of irresistibility is not met.
Article 1693 CCQ deals with the consequences of superior force in connection with the execution of contracts.
Article 1693 CCQ provides that the debtor of a contractual obligation can be relieved of its obligations as a result of superior force and can also be relieved of its obligations where the creditor could not in any case have benefited from the performance of the obligation as a result of the superior force. The burden of proof that the COVID-19 crisis is a “superior force” falls on the debtor.
For example are the government pronouncements that we are experiencing a manifestation of superior force? Can they excuse contractual non-performance?
Did the COVID-19 event:
Parties to a contract affected by the COVID-19 outbreak should also verify to see if they have an insurance policy covering potential losses arising out of their inability to perform their contractual obligations due to superior force. If so, it may be important to respect contractual delays to give notice and any conditions of form or substance in connection with giving such appropriate notice.
Businesses are touched by the COVID-19 outbreak in many ways and to varying degrees. It is therefore very important to analyze the actual or potential repercussions that this pandemic may have on your activities, your contractual relations, your labour relations and the rights of your employees. In order to assess if a contracting party may be excused from performing its contractual obligations as a result of the COVID-19 crisis, each case has to be analyzed having due regard to the facts relevant to that particular case, In light of the fact that the risk is very real and that governments have adopted and will enact more coercive measures, the time has come to review your rights and contractual obligations, your financing arrangements and your insurance policies. Also, bear in mind that your obligation to inform your co-contracting party is increased as a result of the current crisis.
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Nov 19th, 2020
By Laurent Debrun
Jul 14th, 2020
By Frank M. Schlesinger