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COVID-19 Has Halted Construction in Pennsylvania

March 27, 2020

On March 19, 2020, Pennsylvania Governor Tom Wolf has ordered that all non-life-sustaining businesses close their physical locations effective March 21, 2020. Most construction work has not been deemed a life-sustaining business under this order. All businesses that do not comply will be cited, fined, or have their licenses suspended.

To help manage the effects of COVID-19, contractors should conduct a thorough review of their existing contracts for provisions related to delays, such as force majeure clauses.  A force majeure clause typically relieves the parties from completing certain obligations under a contract when extraordinary events arise that are unavoidable and beyond the realistic control of the parties to the contract.

Most common examples include flood, fire, earthquake, or other “acts of God.” It is important to review the exact terms of the contract to know whether the effects of COVID-19 are covered under the construction contract.

Even without expressly mentioning epidemics and pandemics, the force majeure clause may contain language that could provide relief. For example, due to numerous states’ governors declaring a state of emergency, a force majeure provision that includes governmental actions, decrees, or orders may cover COVID-19.

Also, due to proclamations signed by President Trump, parties affected by travel restrictions may be able to use the protections of a force majeure clause. There is the additional issue of labor shortages, stop work orders, and delays caused by these travel restrictions, which have severely impacted overall ability to engage in commerce.

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