Defending Against Nonperformance Of Life Science Contracts

Many life sciences contracts, including intellectual property licensing agreements, development agreements and supply agreements, contain force majeure clauses. Depending upon the language of these clauses, the COVID-19 pandemic may be an event that triggers these clauses and provides a defense to nonperformance of the contract. Companies that are experiencing difficulties complying with or enforcing compliance with their contracts should carefully examine their contracts to determine if a force majeure clause may excuse performance.

As COVID-19 continues to rapidly sweep the globe, government agencies at all levels are being pressed to take difficult measures to curb the spread of the virus. Such measures have included restrictions on travel and congregation that may create business disruption. For example, as of the end of March, 2020, more than 35 states have shelter-in-place rules covering all or part of the state. And, even in states or localities that are not subject to shelter-in-place orders, other factors, such as employee illness, concern about spreading the virus, reduced consumer demand, and supply chain disruptions, are making it difficult for businesses to carry on as usual...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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