Question
Is there a legal test or standard that would apply to help figure out if Force Majeure applies or not?
A test that would determine if a company is trying to escape an unfortunate contract out of convenience, or true inability to fulfill obligations?
Or can a company simply "declare" Force Majeure and cancel contracts they don't like?
Background
A company has a multi-year contract with a service provider.
Yet, the provider is seeking to cancel the contract early, citing Act Of God / Force Majeure due to the Covid Pandemic.
Admittedly, the pandemic has increased their costs and made their work more difficult. But it is unclear that it is bad enough to invalidate a contract. The change in circumstances might make contract unprofitable to them, or inconvenient to carry out. But that is always a risk of contracts, right?
As evidence that the contract should still be in place and enforceable, the company got bids from competitors who offered similar prices (sometimes even slightly cheaper), and a new multi-year term starting now (when the pandemic risks are now well known and obvious)
Thoughts
I believe that if another company can offer a similar service at a similar price, then the contract is still enforceable.
I believe that "Force Majeure" would require that No Reasonable Company could possibly be expected to fulfill the terms of the contract under unforeseen circumstances.
But, that is just my opinion.
