Foreseeability Standard For “Open-Ended”- Catch-All” Provisions
Many agreements list a number of events and then end with an “open-ended” or “catch all” sentence that says something like “… or anything else whatsoever that prevents performance”. These phrases don’t necessarily help and in fact may not provide an excuse from performance. And even where illness or a pandemic is specifically referenced, it is likely that a pandemic will only be considered a Force Majeure event if it was not foreseeable at the time of contracting. Most often, this arises when an event is contemplated elsewhere in the contract; if this is the case, it is likely that the event will be considered “foreseeable,” even if the event is outside of the control of the contracting parties. For example, in Free Range Content, Inc. v. Google Inc., No. 14-CV-02329-BLF, 2016 WL 2902332 (N.D. Cal. May 13, 2016), a California corporation was not able to evade liability using an open-ended Force Majeure provision, because occurrence of the Force Majeure event (in this case, that a third-party website was engaging in activity that violated Google’s policies) was contemplated elsewhere in the agreement. Even though third-party activity was outside of the contracting parties’ control, that activity was not considered a Force Majeure event.
We do not know of any California case interpreting the foreseeability of an outbreak of disease like COVID-19. However, certain government actions have been considered “foreseeable” in the Force Majeure context. For example, the closure of a factory by a government agency could be considered foreseeable if the contracting party was aware of the potential for a shutdown if at the time of contracting.
For more information or questions regarding Force Majeure and other assistance for your business, email firstname.lastname@example.org.