Schedule Free Conference Call
What is the impact of COVID-19 on Contracts?
Globally we are all experiencing strenuous circumstances due to the COVID-19 pandemic. On the personal level, the mitigation measures have an impact on your employment, volume of work and finances, and in some instances, they might impede your ability to fulfill your contractual obligations.
What happens in this scenario? What can be done? Is it possible to terminate a contract due to COVID-19?
To answer these questions, it is important to know that according to Mexican law, circumstances like the mitigation measures for COVID-19 can be classified as Force Majeure or Fortuitous Case. Force Majeure is an unpredictable circumstance produced by nature, and Fortuitous Case is an unpredictable circumstance produced by human acts.
If you signed a contract in Quintana Roo, it is likely that the Civil Code of Quintana Roo will be the applicable legislation to all terms not clearly articulated in your contract. Often, because of unpredictable natural events, contracts executed in Quintana Roo have provisions for Force Majeure acts, such as earthquakes, tidal waves, hurricanes and even pandemics.
If you’re not 100% sure what your contract says about Force Majeure, have a lawyer review your contract. The review should answer the following questions:
Does your contract contain penalties for non-compliance?
What is the cost of the penalties?
Does your contract contain remediation clauses?
Did your contract contemplate Force Majeure? If so, how should it be interpreted?
In the circumstances of COVID-19, it’s impossible to say yes or no without knowing the circumstances of the particular case and the clauses of the contract. However, in our experience as litigation lawyers, there is legislation and precedents that will help support your case if you need to terminate your contract because of COVID-19 without paying penalties and/or consequential damages. Force Majeure can be used as a defense, though to use it successfully your lawyer needs to be skillful and experienced. Judges are not obliged to consider Force Majeure if your case was not properly argued as such. And it’s important to note that in Mexico, contracts cannot be unilaterally terminated without a judgment.
To learn more, please consult our article I signed a contract to buy a condo in Mexico. Can I terminate my contract to buy a condo because of Covid-19?
Litigation Lawyers.Mx can help you to determine the best path forward. Schedule a Free Call.
Schedule Free Conference Call
- Can I terminate my contract to buy a condo because of Covid-19?-
- What can I do if I cannot keep paying creditors in Mexico due to Covid?
Generally speaking, yes! Civil legislation in Mexico considers this type of circumstance “Force Majeure”. Force Majeure may also prevent defaults from being considered an "intentionally wrongful act".
The judicial procedure of bankruptcy settles debts in a non-conflictive manner. It can be used for both civil and commercial matters, and, when used commercially, is designed to allow the business to continue operating.
English 
Spanish
[…] mayo 11, 2020 by admin Working with UsHome | Working with Us | What can I do if I cannot keep paying creditors in Mexico due to Covid? Can I terminate my contract to buy a condo because of Covid-19? What is the impact of Covid-19 on contracts? […]
[…] with Us | Can I terminate my contract to buy a condo because of Covid-19? What is the impact of Covid-19 on contracts? What can I do if I cannot keep paying creditors in Mexico due to […]
[…] | Can I terminate my contract to buy a condo because of Covid-19? What is the impact of Covid-19 on contracts? What can I do if I cannot keep paying creditors in Mexico due to […]
[…] Can I terminate my contract to buy a condo because of Covid-19? What is the impact of Covid-19 on contracts?- What can I do if I cannot keep paying creditors in Mexico due to Covid? […]