When events take a dramatic turn, parties may be left unable to perform their contractual obligations, or may find that their counterparty is unable or unwilling to perform. In such circumstances, a party may be able to rely on contractual provisions, such as a force majeure or material adverse change (MAC) clause, to suspend its contractual obligations or to avoid them altogether. Alternatively, a party may argue that the contract has been brought to an end automatically as a result of the doctrine of frustration.
The question of when a party can suspend or avoid performance due to an intervening event or change of circumstances has gained particular prominence in recent years, initially in anticipation of Brexit and more recently in light of the disruption caused by the Covid-19 pandemic.
In our latest contract disputes practical guide, we consider when such rights or principles may be triggered, as well as some practical steps that contracting parties can take to protect their position.
The other guides in the contract dispute series are available on our Litigation Notes blog.