COVID-19: IMPLICATION ON THE ENFORCEMENT OF CONTRACTS IN NIGERIA
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The outbreak of the Corona Virus pandemic (COVID-19) which has claimed over 37,832 lives as at 31st March, 2020 has caused significant disruption in business activities, trade and commerce, activities of essential industries in Nigeria and across the globe. More specifically, the travel & tourism sector, hotel and hospitality businesses and the transportation sectors are the most hit by the restrictions placed on movements by the national governments as a way of curtailing the spread of the deadly virus.
The major concern of many individuals and corporate entities in Nigeria and across the globe is whether there exists any form of justification for non-performance of their contractual and financial obligations. Despite the fact that many businesses in Nigeria now allow their employees to work remotely, it is almost certain that many businesses and individuals will fail to meet with their obligations under various contracts and will unavoidably be in breach of such contracts. We have attempted here, to examine the impact of COVID-19 from a legal perspective with concentration on commercial disputes arising from non- performance of contractual and financial obligations. The parties in breach are likely to hide behind the principle of force majeure stipulated in their contracts.
Force majeure clause is a provision in a commercial agreement that excuses a party from performing its contractual obligations as a result of an event or factor that the parties could not have reasonably anticipated or controlled. Force majeure events are not exhaustive but include floods, earthquakes and other unforeseeable events which constitutes “acts of God”. It can be argued that COVID-19 is a force majeure event which has led to the grounding of economic activities in many countries.