Will COVID-19 Terminate Your Contracts? A Step-by-Step Guide to Understanding Force Majeure Clauses During the Pandemic

The COVID-19 pandemic is causing severe damage to the world economy. Will Japanese companies’ current contracts also be affected?
As the last few weeks demonstrate, the answer to that question might be “yes.” Baker McKenzie has recently published a comparative analysis relating to COVID-19 and force majeure (covering the laws of 28 jurisdictions). However, as a first step, it is very useful to understand the basic terms (and meanings) of the force majeure clauses in your existing English-language contracts. In this alert, we suggest a simple, step-by-step approach for analyzing force majeure provisions in contracts governed by US or English law.