The recent outbreak of Covid-19, which the World Health Organisation classified as a pandemic,
has brought to the fore significant issues for businesses. The disease has a profound impact on the
performance of businesses and their underlying contractual relationships.
Generally, a party to a contract cannot be discharged of its obligations thereunder and it will
be potentially liable to its counterparty for a failure to comply with its contractual obligations.
Nonetheless, scenarios like the one we are currently witnessing may also bring the following
two concepts into play:
(1) the concept of force majeure
(2) the concept of frustration
In the following analysis, the two concepts are analysed from the standpoint of the Cyprus law
currently in force. As the concepts may be interpreted and applied differently in different
jurisdictions, the governing law of the relevant contract is crucial. Parties to such transactions
are encouraged to seek legal advice and guidance on the matter from a competent law firm.