A Few Cases, One Law: Why COVID-19 is not a ‘contract-killer’

law + life + beyond

In the wake of the nationwide, worldwide even, lockdown on account of COVID-19 there is a mad rush amongst businesses to cut costs. Nobody can blame them inasmuch as these are difficult times and the proverbial belt requires tightening. Cash flow is weak, and expenses are a constant. In such times, it is but obvious that businesses want to eliminate as many payouts as possible. Typically, these payouts are rent, inputs, and salaries.

A. The Paradigm

Most businesses have three key payouts – rent, inputs, and salaries. Since business has been shut for almost a month and is likely to remain so for atleast another fortnight (not to mention the time it may take for normalcy to return), every person with a payment obligation is asking one question – can I claim force majeure or frustration of the contract and avoid making payments? I have consistently told anybody who has…

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