When the COVID-19 pandemic postponed a marquee auction event, the auction house relied upon a force majeure clause to terminate an agreement to sell a high-priced painting and refused to pay the seller the guaranteed minimum price.
A federal district court found the language of the agreement’s termination provision controlled, and the COVID-19 pandemic was a natural disaster within the meaning of the contract. Accordingly, ABA Litigation Section leaders suggest that litigators take care in interpreting force majeure clauses to determine whether particular events trigger these provisions.
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