Experienced family lawyers know that they often become a kind of general counsel to their clients. Family law is in no small measure closely related to contract law. In a state that has seen a shut down order issued for all but essential services, there are many contracts, which have been rendered impractical or frustrated by events. The legal term for this is taken from the French; “force majeure.” Clients who paid handsome tuitions and shipped their kids to college in January are watching them trickle back. Clients with seashore homes on the coast are being told or asked to stay away. Season ticket holders for hockey and basketball are notified that it is “Game off” for the moment. Many are parties to property settlement agreements that require properties to be sold, refinanced or payments to be made based upon normal conditions. These are scarcely normal conditions.
When is an agreement unenforceable? There is no easy answer and lawyers are combing through sections of law books that still have bookmarks in them from early 2009 when they were last examined. Among those cases is Krell v. Henry, decided in 1903 in England. Henry rented a house on the parade route to be followed by Edward, VII for his coronation. Unfortunately, the parade was cancelled because Edward developed appendicitis. When Krell sued Henry for the rental fee Henry responded his purpose was frustrated and no rent was due. The King’s Bench Court ruled that no rent was due as the rental was for a coronation parade that never occurred.
Of course, parties can allocate foreseeable risk in the agreements they form. Nonetheless, we have not had this kind of pandemic in 100 years. Today there are Pennsylvania cases which discuss these issues including Greenfield v. Korlea, 380 A.2d 758 (Pa. 1977) and Davis v. Borough of Montrose. These involve much more foreseeable events, specifically fire and mold. A similar case involving a frustrated permit to build a dam is found in Hart v. Arnold, 884 A. 2d. 316 (Pa. Super. 2005). The law in this area is based in large part on the 1981 Restatement (2d) on Contracts.
At Section 261:
Discharge by Supervening Impracticability Section 261
Where, after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption, on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.
And at Section 265:
Discharge by Supervening Frustration Section 265
Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.
The general rule is that courts are chary to set aside agreements where there are less drastic remedies. Nevertheless, remedies are in the eyes of the beholders until a judge decides otherwise and with courts largely closed except for emergent cases, there will be plenty to fight about.
Every business lawyer in America is reviewing his or her local cases interpreting these contract rules. Family law is contract law and our approach should be the same.
