Tag archives: Force majeure clauses

COVID-19 and Finance Documents: Could the Material Adverse Effect clause be triggered?

How does the COVID-19 pandemic affect borrowers and lenders and their financing arrangements? A Material Adverse Effect (MAE) clause is included in most finance agreements. It is a catch-all concept to capture unpredictable and unforeseen events or circumstances that would otherwise be difficult to incorporate into the agreement specifically. Broadly, a MAE clause covers a … Continue reading

Impossibility may be no defence if performance overdue (COVID-19)

As a general rule, a party is excused from rendering contractual performance if it becomes physically or legally impossible for such party to perform. But a defence of impossibility of performance will not succeed if, when the impossibility intervened, the performance was overdue. In such a case, the rule is that lateness perpetuates the obligation, … Continue reading

Force majeure and contractual obligations (COVID-19)

COVID-19 and force majeure Will the corona virus (COVID-19) constitute a force majeure event under South African law? The answer to that is it depends. The virus has been declared as a pandemic by the World Health Organisation and is causing economic chaos on an international scale never seen before, due to the closure of … Continue reading

Force majeure clauses – a ‘Day Zero’ respite

Property developers are not immune to the water restrictions being imposed by the City of Cape Town and, in terms of the recently published Level 6 water restrictions, have had to reduce their monthly consumption of municipal drinking water by 45% from 1 February 2018. With day zero looming, contractors need to be aware of … Continue reading