Coronavirus’ impact on contracts: can I cancel my vacation bookings? Get out of contract to buy a house?

The current coronavirus/COVID-19 pandemic has created several conditions most of us have not faced before.  It has been termed a national emergency.  For many, their incomes will be negatively impacted, any comprised health conditions may make travel prohibited or extremely dangerous, and life, in short, has been put on hold.

I have seen questions such as, “Can I cancel my vacation bookings without a penalty?” and “I’m in contract to buy a house but now I’m not sure I’ll have a paycheck to afford the home, moving expenses.  Can I back out of buying?”  Some companies are permitting vacation cancellations, maybe your seller will let you out of the real estate purchase contract.  What if they don’t?

In most contracts there is a force majeure contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise.  Your ability to claim relief under this clause depends on the terms of the contract and specifically the force majeure provision’s language.

See this excellent article for more information about force majeure provisions and how they might affect you and your ability to comply with contractual obligations.  The article is geared towards businesses but applies to individuals as well.