How does COVID-19 affect contractual obligations and liability?
Unfortunately, there is no uniform answer. As with many things in law, it depends on the circumstances and the language of the contract itself.
What does the contract say?
Many contracts, particularly those that were well-drafted by a lawyer, will have language that specifically deals with what happens when external events impact one of the party’s ability to fulfill their duties. Generally, these are termed “Force Majeure” clauses, but they could be under headings such as addressing delays, termination or delivery/performance timelines.
Such clauses are typically drafted to release one or both parties from their obligation to provide services or make payments due to external, unforeseen circumstances that are not the fault of either party.
Depending on how they’re written, government-mandated shutdowns or restrictions impacting the business should be sufficient to trigger these clauses.