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”:
Continue Reading Second Circuit: COVID-19 Pandemic Triggers Contractual Force Majeure Clause for Circumstances Beyond the Parties’ “Reasonable Control”

In a decision last week, Judge Cote ruled that the COVID-19 pandemic qualified as a “natural disaster” that fell within the scope of a contractual force majeure clause. The defendant auction house had agreed to auction a painting owned by the plaintiff and pay it a guaranteed minimum price, but invoked its right to terminate the agreement after the auction was postponed by the COVID-19 pandemic and related government restrictions.

The force majeure clause applied in the event of “circumstances beyond our or your reasonable control, including, without limitation, as a result of natural disaster, fire, flood, general strike, war, armed conflict, terrorist attack or nuclear or chemical contamination.” Judge Cote held that the pandemic was “a circumstance beyond the parties’ reasonable control” and a “natural disaster”:Continue Reading Judge Cote: COVID-19 Pandemic is a “Natural Disaster” for Purposes of Contractual Force Majeure Clause