Many of the supply chain issues have that have been seen in other jurisdictions have also affected Ireland. Where supply chain disruption arises and a party seeks to rely on a force majeure clause, the relief available to that party will depend on wording of the clause. As with other common law jurisdictions, a force majeure clause must be included in a contract. In Ireland, there is no legal presumption of force majeure and so if a contract does not contain a force majeure clause, the Irish courts will not read one into it.
The requirements that must be satisfied before a force majeure clause may be relied upon will depend on the wording and proper interpretation of the specific clause in question. It is important to review the wording of the clause carefully to determine if it is drafted in such a way as to cover the COVID-19 pandemic.
If a party wrongly relies on force majeure as a defense, it will leave itself exposed to a claim for breach of its contractual obligations and, at its most extreme, may see the counterparty terminate the contract for breach and seek potentially significant damages as a consequence.
The doctrine of frustration can also be considered and if found to apply, frustration will bring a contract to an end. In practice, however, the bar to bringing a claim in frustration is typically considered to be very high.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
