Force Majeure and COVID-19: Legal risks of a double-edged sword

This policy brief examines the legal complexities of invoking force majeure during the COVID-19 pandemic, warning governments that arguing against the concept to hold companies accountable may undermine their own future legal defenses for pandemic-related state actions.

• Force majeure is defined as an event beyond an entity's control that makes fulfilling contractual obligations impossible, either temporarily or permanently, allowing the entity to stop performance without facing financial penalties.
• Governments face a 'double-edged sword' because they may need to oppose force majeure claims made by companies to ensure operational continuity, while simultaneously needing to invoke force majeure to defend their own government measures in contract disputes or investor-state disputes (ISDSs) under international investment treaties.
• China has utilized force majeure declarations for many of its commercial contracts, likely to protect its companies from foreign claims regarding the non-purchase of inputs or non-delivery of products.
• The document advises governments to adopt a cautious legal strategy: avoiding broad public statements on force majeure, using 'without prejudice' communications with companies, and conducting risk assessments of their investment treaty obligations and contracts to prepare for potential litigation from law firms and third-party funders.

APA

International Institute for Sustainable Development (n.d.). Force Majeure and COVID-19: Legal risks of a double-edged sword. https://www.iisd.org/system/files/publications/force-majeure-covid-19-en.pdf

Chicago

International Institute for Sustainable Development. Force Majeure and COVID-19: Legal risks of a double-edged sword. n.d. https://www.iisd.org/system/files/publications/force-majeure-covid-19-en.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Force Majeure and COVID-19: Legal risks of a double-edged sword |url=https://www.iisd.org/system/files/publications/force-majeure-covid-19-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndforce, author = {{International Institute for Sustainable Development}}, title = {{Force Majeure and COVID-19: Legal risks of a double-edged sword}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/publications/force-majeure-covid-19-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }