Private Law Theory

ABSTRACT
Outbreaks of disease, such as the coronavirus disease 2019 (‘COVID 19’) pandemic, have the potential to significantly impact the performance of all types of contract work. Where such occurrences are rare and unexpected, it is unlikely that the contracting parties factored the occurrence into contract performance terms such as price and schedule, notwithstanding the significant impact that a pandemic could have on those performance terms. When contract performance is impacted by an unanticipated occurrence such as a pandemic, the contracting parties will naturally seek to shield themselves from the economic impact by attempting to shift the risk of the catastrophe to the other contracting party. The contract language and governing law will determine whether, and to what extent, either contracting party may be excused from strict performance of the contract terms, where the party’s ability to perform is impacted by a pandemic. This area of law is often commonly referenced as ‘force majeure’. This paper examines the impact of pandemics on the legal obligations of parties to contracts (particularly construction contracts) with State Departments of Transportation (‘State DOTs’) and other transportation agencies, in the wake of the COVID-19 pandemic. Contract terms and the governing law have evolved over time, as succeeding generations have experienced different catastrophes, including not just pandemics but also war and terrorism, all of which have their own unique impacts on contract performance. It is likely that both State DOT contracts and the governing law related to force majeure occurrences will continue to evolve in response to COVID 19, as legal claims and disputes arising from COVID 19 work their way through the courts and other dispute resolution forums.

Wyatt, Timothy R, Pandemics and Contractual Issues (January 7, 2024), National Cooperative Highway Research Program (NCHRP) Legal Research Digest, No 93, 2024.