Will coronavirus lead to nationwide voiding of contracts?

This could lead to an unparalleled number of lawsuits, which could overwhelm a judicial system that is itself barely operating at present.

By YONAH JEREMY BOB
The High Court of Justice during a hearing (photo credit: ALEX KOLOMOISKY / POOL)
The High Court of Justice during a hearing
(photo credit: ALEX KOLOMOISKY / POOL)
The Justice Ministry on Tuesday announced that it has established an intergovernmental committee to evaluate what impact the current coronavirus situation could and should have on complying with contracts from a system-wide perspective.
The presumption is that the unique coronavirus situation may lead to an unprecedented number of contracts being violated and delayed.
In turn, this could lead to an unparalleled number of lawsuits, which could overwhelm a judicial system that itself is barely operating at present.
The aspiration of the committee is to find a system-wide solution to the issue which will balance the various public interests at stake so as to avoid chaos and uneven outcomes for different parties, based on a situation that was beyond their control.
There is also particular concern about contracts and leases relating to living spaces and business premises.
The new committee will be trying to find solutions that will avoid mass evictions of individuals or businesses, which could further traumatize the public and delay a broader countrywide recovery.
The committee will hold hearings on the issue from impacted parties on an accelerated basis.
Traditionally, in law there is a category called force majeure or acts of god, such as major natural disasters like earthquakes or hurricanes.
If such a natural disaster occurs and makes it impossible for someone to fulfill his obligations under a contract, that party can receive an exemption from complying with the contact.
But even those situations deal with individual contract problems and do not necessarily look at issues of an entire society all at once, as the new committee expects to do.