Along with the more pressing concerns for the safety of their families and communities, owners and contractors are both confronted with another unknown: how will courts handle the disputes that eventually develop following the pandemic?
Unfortunately, there are no obvious past parallel that members of the construction industry can look to when predicting how courts will handle the pandemic. While the Spanish Flu of the early 20th Century is a logical option to provide guidance, there are very few cases directly discussing that pandemic, let alone its influence on the construction industry. For example, one of the few cases to actually refer to the Spanish Flu is Frush v. Ohio State Life Ins. Co., 31 Ohio Dec. 49, 53 (Ohio Com. Pl. 1920). There, in the context of an insurance coverage dispute and referencing a critical exclusion, the Court explained that though the insured “contracted [and died from] the disease known as the Spanish Flu,” it was “well known, the danger in civil life was just as great as in military service in respect to the disease call the ‘Flu.’” However, this older commentary in the context of a life insurance policy is not particularly helpful for owners, contractors, designers or suppliers today.
Assuming the absence of direct authority in your jurisdiction regarding pandemics and construction, where can owners and contractors turn next? The good news is that even without a direct road map to handle the consequences of a pandemic on a construction project, legal counsel may be able to help those in the construction industry with guidance from other scenarios. For example, SNB Farms, Inc. v. Swift & Co. addressed “an outbreak of Porcine Reproductive and Respiratory Syndrome . . . which led to hog production problems.” No. C01-2077, 2003 WL 22232881, at *3 (N.D. Iowa Feb. 7, 2003). The connections between hog farming and construction may not be obvious, but the court’s treatment of the pandemic affecting the animals at the heart of that contract may provide guidance for navigating force majeure issues in construction contracts. If interested, Danny Inglese’s article in this issue addresses force majeure in more depth.
During these uncertain times and without clear precedent governing the impacts of pandemics on construction, those in the construction industry will likely turn their focus to their actual contract terms. That is a logical place to start. For example, in SNB Farms, the court considered the contractual notice requirements to invoke a force majeure excuse and found the failure to properly provide notice dispositive. Given the consequences, those in the construction industry may want to consider their compliance with the contractual and notice requirements and review their respective agreements. If not, creative and novel legal arguments may be required to try and get out of a tough position. However, such arguments lack the certainty that many in the industry want. With that in mind, you may want to consider obtaining the timely advice of knowledgeable legal counsel.
