Contract Cancellations During COVID-19

Author: Christina De Palma | | Categories: act of God , contract , contract cancellation , COVID-19 , doctrine of frustration , frustration , Provincial Order

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COVID-19 has had a significant impact on so many aspects of our lives, including many contracts that were to be executed during this time. Orders implemented by the Province of Ontario prohibiting gatherings of more than five people have impacted the ability to hold events that may have been scheduled quite some time ago. Trade shows, home and craft shows, conferences, fundraising events, hall rentals, wedding vendors and so much more are all impacted at this time. 

It can be argued that the doctrine of frustration applies to the inability to fulfill these contracts and can deem the contracts null and void. Some examples of frustration include: 

  • Frustration applies when there is no provision in a contract to address such situations
     
  • Frustration can be applied to situations where a party’s ability to fulfill a contract has been affected by a third party – the effect is out of the party’s control and is unexpected
     
  • Frustration is generally referred to as ‘an act of God principle’ as there would need to be a drastic, unexpected event that has occurred to be able to argue frustration

A global pandemic such as COVID-19 is certainly drastic, unexpected and has impacted the ability to fulfill contracts. The implementation of the Provincial Order can also be argued to be a third party affecting the ability to fulfill contracts. If the contract is deemed to be frustrated, failure to abide by the contract or make payment in accordance with the contract is not considered a breach of contract. It is as if the contract doesn’t exist

Frustration also means that since the contract essentially no longer exists, any deposits made are to be refunded. This can have a significant impact on small local businesses. However, deposits can still be partially retained for services partially rendered or other value already received.

These are unprecedented times and many people are confused and require assistance. Here at De Palma & Associate, we offer free initial consultations to discuss your legal matter and there is no obligation to retain our services at this consultation. As well, our fees are charged as a flat rate in an effort to be transparent about the cost of our services. We also do not ask our clients to provide us with retainer funds. We believe in building trust with our clients and that is why we invoice our clients as their case progresses and they see work being done as opposed to requesting money from them upfront. And in an effort to ensure our clients feel comfortable reaching out to us for questions or an update on their case, we do not charge for phone calls/emails with our clients as well as not charging for follow up meetings at our offices. 

 

 

With offices located in Barrie and Wasaga Beach, De Palma & Associate can provide legal representation for Small Claims Court cases, landlord & tenant disputes, traffic tickets, United States entry waivers, criminal pardons (record suspensions) and document commissioning throughout the Georgian Bay area and the GTA. If you have any questions or require legal representation, give us a call at De Palma & Associate - (705) 429-2401.

 



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