Responding to COVID-19: How to Limit Damages After a Breached Contract

March 16, 2020Article
The Hollywood Reporter

You have just decided, or have been forced, to breach a contract due to the spread of COVID-19. You are an actor who has decided not to show up on set, or you are a company that will not (or cannot) complete a film, release a film, hold an event or pay for something that is now worthless to you due to one of these events. Now what?

One option is to bite the bullet and be prepared to pay for all damages that flow from your breach. Ouch. A better option is to rely on various defenses available to you by law. If your contract does not have a force majeure clause (discussed below), you are going to have to rely on one of two defenses that are implied by law (“the Default Rules”).