In an opinion last week, the Second Circuit affirmed Judge Cote’s decision (covered here) finding that the force majeure clause in a contract relating to an art auction was triggered by the COVID-19 pandemic.
Judge Cote had found that COVID-19 qualifies as a “natural disaster” within the clause, and the appellant argued that there was at least fact question as to whether the pandemic was truly a natural disaster, insofar as it may have been the result of a leak from a Chinese lab of man-made, genetically engineered viral material. The Second Circuit decided it need not resolve that issue, and seized on different language in the same clause about circumstances beyond the parties’ “reasonable control”:
The pandemic and government shutdown orders are the same type of events listed in the force majeure clause, which include, “without limitation,” natural disaster, terrorist attack, and nuclear or chemical contamination. Each of the enumerated events are of a type that cause large-scale societal disruptions, are beyond the parties’ control, and are not due to the parties’ fault or negligence.