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COVID-19 As Shield Against Breach Of Contract: Force Majeure Or Frustration

In the wake of the outbreak of a deadly virus in Wuhan, Central Republic of China, the World Health Organization acting swiftly on March 11, 2020, declared the virus which is now infamously known as COVID-19 a pandemic. The virus constitutes a public serious health risk as its spread is global, infecting people and causing the death of many. Tackling it, therefore, requires a coordinated international response.

So, in a bid to contain the rapid spread of the virus globally, countries across the world quickly imposed various containment strategies that have unarguably affected local and global trade, with companies, employers of labor and employees at the receiving end. As expected, the ability of corporate institutions and individuals to fulfill contractual obligations entered into is now seriously in doubt as the economic fortunes continue to dwindle across the globe. From the closing down of schools, operation of restaurants and bars, and prohibiting gatherings of more than 20 persons to a total lockdown through the enforcement of social distancing and ban of free movement of persons locally or internationally, it is unlikely to find parties honouring contracts.

This paper examines the potency of the COVID-19 pandemic as a complete shield, exculpating a contracting party from performing its contractual obligations under the concept of force majeure and under the common law doctrine of frustration.

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