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RELIEF FOR BUSINESS LOSS DUE TO COVID-19: PART 2!

Has Your Business Been Affected By The Coronavirus Pandemic? Let’s Talk Legal Options

In last week’s post, we discussed the ways you might be able to find some immediate relief for your business in the midst of this COVID-19 climate via the Force Majeure clause.

However, not all contracts contain this clause. So we’ve done you a solid and created a two-part series to explore some other legal options.

So what do you do if your contract does not contain a force majeure provision and you experience business interruption or loss?

Don’t worry, you may not be completely out of luck and your business may still get relief through one or more of the following legal options:

Frustration/Impossibility

These two concepts excuse contract performance where they apply.

In California, the defense of impossibility is expanded to include the doctrine of impracticability which is easier to demonstrate than impossibility. Under impracticability, a party can seek to excuse performance when it is so difficult and financially burdensome that it becomes “impracticable.”

Impracticability is invoked when there is excessive and unreasonable cost to carry out a contract and not merely when performance is more difficult or expensive than originally contemplated.

California also recognizes a “frustration of purpose” defense which can release a party from performing under the contract where an unforeseeable event essentially makes the contract pointless.

Suspension of Contract

You should look into the suspension or termination provisions in your business contracts to mitigate financial impact.

Some contracts such as construction contracts allow for termination when work is halted for a long period of time. Suspension and termination provisions can also assist owners by allowing temporary project suspension with less financial risk.

While the COVID-19 outbreak continues to evolve, you should carefully evaluate your contracts to make the best decision concerning ongoing work, project safety, and the mitigation of financial and timelines impacts.

Contact us to assist your business in evaluating your best options today at (949) 436-2785.

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This article is informational only and meant to provide guidance. It is not meant to be legal advice and it does not create an attorney-client relationship. For what to do in your specific situation, please consult with a qualified Construction Law attorney.

Testimonials

Mahyar was a big part in helping start our company and setting up our corporation. She also went to battle with a Billion dollar Corporation to keep our doors open when they tried everything to shut us down.

Danny Lamping

Classic Refrigeration Company

In 2008 -2009, our company was involved in a lawsuit with over 1 million dollars claimed against us. Mahyar Ghassemian handled our case expertly and conscientiously. She explained on a regular basis the progress of our case and how each of the actions of our opponent would ultimately affect our case. At no time did we feel alone or compromised as Mahyar boldly stayed her course which eventually provided us with the satisfactory outcome we had hoped to achieve. She will be our first call should the need arise in the future.

Kelly Owen

Clarion Construction, Inc.

Many years ago an insurance carrier hired Mahyar Ghassemian to defend my construction firm in civil litigation. Not only was Ms. Ghassemian very knowledgeable and competent regarding the legal proceedings, but she was also personally vested in our well-being; she cared what happened. She counseled us regarding the various options, listened to our input and proceeded accordingly. In multiple cases with Ms. Ghassemian, we have never experienced a negative outcome. Today my first call when a potential legal issue is on the horizon is to Ms. Ghassemian. She is both extremely effective and cost conscious.

Russell Patterson

The Patterson Company

Small Firm Value – Large Firm Expertise