What Do They Mean and What Should You Do?
By Melanie Balestra, NP, Esq.
Many of you may have signed contracts for work or for other services with a Force Majeure clause. Force Majeure is defined as unforeseeable circumstances that prevent someone from fulfilling a contract. An example of a Force Majeure clause in a contract is:
FORCE MAJEURE. A party’s performance of its obligations here under shall be excused due to the occurrence of an event beyond the reasonable control of such party which make it commercially impracticable, illegal or impossible to perform as originally contracted under this Agreement, including without limitation, strikes, shortages, riots, insurrection, fires, flood, storm, explosions, acts of God, war, civil unrest, acts of terrorism, restrictive applicable laws or regulations, earthquakes (“Force Majeure Event”) , provided however, that this section does not excuse any separate breach of this Agreement. In the event of a Force Majeure Event, either party may terminate the Agreement without any further liability, except for payment for any services rendered by Property prior to the effective date of termination.
As you will note in reading this, there is no mention of communicable diseases which would include COVID-19. However, it does state including without limitation which means that the cancellation of the contract is not limited to just what is mentioned. Therefore, it is very arguable that if the performance of your agreement is made impossible by an unforeseeable catastrophic event that neither party is responsible for, the contract can be canceled without damages to either party. You should be able to not complete the contract/agreement without repercussions. For future contracts you may be involved in, make sure there is a Force Majeure clause that includes communicable diseases.
Why do I bring this subject to the forefront? For many reasons. Many of you may be contracted to provide services outside of the standard NP services such as providing educational or specific health services that are not absolutely necessary at this time. Many of you may have signed up for conferences that include hotel reservations and airfare. If the agreements that you signed have a Force Majeure clause, you can request a refund or state that you do not owe any monies.
I am also receiving emails about practices that are cutting incomes of all employees by 20 to 30 percent rather than having to terminate employees. They may be claiming Force Majuere which is applicable. However, make sure that the decrease in income includes all employees and partners including physicians.
The question right now is how long will we remain in a state of Force Majuere. California and New York appear to be the most affected states by COVID-19. Predictions have been from six to eight months before we are completely safe. Bottom line, we just don’t know. Stay well, be safe and keep calm.
Melanie Balestra is both an attorney and a nurse practitioner. She is a former President of CANP, and is currently President of the American Association of Nurse Attorneys, which in 2016 honored her with the award for Outstanding Health Law & Compliance Section Member. She has law offices in Irvine and Newport Beach, and continues to work part time as a PNP and Director of Pediatrics at the Laguna Beach Community Clinic.