This clause specifically addresses how COVID-19 or pandemic-related events will be treated within the contract's force majeure framework and dispute resolution process. Rather than relying on general force majeure language, this clause explicitly carves out pandemic-related performance failures as excusable events, while simultaneously establishing a streamlined dispute resolution mechanism for disagreements about whether COVID-19 actually prevented performance or whether a party simply failed to perform. The clause matters because it removes ambiguity about whether pandemics qualify as force majeure (which was heavily litigated during 2020-2021) and creates a predetermined pathway for resolving disputes without full litigation, potentially through mediation, expert determination, or expedited arbitration.
The practical value of this clause is significant because pandemics create genuine performance obstacles (supply chain disruptions, workforce unavailability, facility closures) that are difficult to predict and allocate through standard contract language. However, the clause can be problematic if it's too broad—allowing parties to claim pandemic-related excuses for performance failures that were actually preventable through reasonable alternative measures. Conversely, if the clause is too narrow, it may not adequately protect a party facing genuine pandemic-related impossibility. The dispute resolution mechanism must be carefully designed to avoid creating a faster path to disputes rather than preventing them.
Ensure the clause clearly defines what "COVID-specific" or pandemic-related events trigger the force majeure protection—does it require government-mandated closures, or does it include supply chain disruptions and workforce shortages? Establish objective criteria for determining when performance is actually impossible versus merely more difficult or expensive. Include a requirement that the claiming party must demonstrate good-faith efforts to mitigate or find alternative performance methods before invoking the clause. Specify the dispute resolution process clearly (e.g., 30-day negotiation period, then mediation, then expedited arbitration) and consider whether the clause should sunset or be revisited as pandemic conditions change. Review this clause annually to ensure it remains appropriate to current conditions.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause specifically addresses how COVID-19 or pandemic-related events will be treated within the contract's force majeure framework and dispute resolution process.
Why should I care about this clause?
Rather than relying on general force majeure language, this clause explicitly carves out pandemic-related performance failures as excusable events, while simultaneously establishing a streamlined dispute resolution mechanism for disagreements about whether COVID-19 actually prevented performance or whether a party simply failed to perform.
What are my options?
The clause matters because it removes ambiguity about whether pandemics qualify as force majeure (which was heavily litigated during 2020-2021) and creates a predetermined pathway for resolving disputes without full litigation, potentially through mediation, expert determination, or expedited arbitration.
How does this affect small businesses?
The practical value of this clause is significant because pandemics create genuine performance obstacles (supply chain disruptions, workforce unavailability, facility closures) that are difficult to predict and allocate through standard contract language.