At this point in the pandemic, every attorney has taken a refresher in contracts law regarding force majeure, whether for our clients or for our own sake. Generally speaking, a force majeure provision allows parties to delay, suspend or terminate an agreement due to circumstances beyond either party's controls. When COVID-19 struck, there were people pontificating whether a pandemic qualifies as a force majeure event if it's not specifically stated in a provision. With the wide array of government orders, travel restrictions and the like, it is hard to make a good faith argument that COVID-19 is not a force majeure event.  

A good percentage of lawyers will be hired to argue that COVID-19 does not trigger force majeure, especially when it relates to making payments. Additionally, many agreements between parties are either oral or do not include a force majeure clause. Where there is not a force majeure clause or it is inadequate for the situation, Georgia has a longstanding "Act of God" statute that provides:

"If performance of the terms of a contract becomes impossible as a result of an act of God, such impossibility shall excuse nonperformance, except where, by proper prudence, such impossibility might have been avoided by the promisor." O.C.G.A. § 13-4-21 (2010)

The Georgia Court of Appeals has provided that an act of God for purposes of excusing performance of a contract is an "event in nature so extraordinary that the history of climatic variations and other conditions in the particular locality affords no reasonable warning of them." Sampson v. General Electric Supply Corp. 78 Ga.App. 2 (1948).  

COVID-19 is unprecedented in our lifetimes. Not only is the virus novel, the response is extraordinary. Planes are parked in the desert because travel restrictions have brought them to a halt. Images of cities from around the world during rush hour show the ghost towns they have become as people shelter in place as much as possible. Other than essential businesses such as hospitals and grocery stores, the world has come to a stop. COVID-19, and the response to it, are extraordinary acts of nature. 

However, Gov. Brian Kemp has issued an executive order that will allow nonessential businesses to reopen as early as Friday, April 24. The state does not comply with federal benchmarks for reopening, according to the Washington Post's Phillip Bump. Regardless, the governor is telling the world that Georgia is open for business while everywhere else remains closed.  

The financial impact of opening businesses will be as negative as keeping them closed, if not more so, due to exposure to additional liability. Businesses will have to absorb the extra expenses required to comply with the executive order. Additionally, they will have to comply with the Families First Coronavirus Response Act, or FFCRA, when they bring employees back to work, which requires sick pay and paid leave for employees dealing with COVID-19 issues such as lack of childcare or being sick.

Significantly, a business that opens needs customers and clients to support their efforts.  A recent poll by NBC and the Wall Street Journal found that 60% of Americans support the stay-at-home orders to stop the spread of COVID-19. A business that reopens will not be able to survive financially if they only serve 40% or fewer of the customers they historically have served.  

Currently, parties to agreements for everything from the supply of goods, movies productions and real property transactions are cooperating to find solutions to the impact COVID-19 is having. So long as a business is closed, they have leverage to work out solutions with lenders and landlords alike. However, Governor Kemp's executive order will take away some leverage because landlords and lenders may look to his order to tell the defaulting party that they can open and therefore should open, even if it's not otherwise financially feasible. 

Nancy C. Prager is a corporate and intellectual property transactions attorney in Atlanta. Prager Law serves technology, entertainment and agency clients as well as other small and mid-size businesses.