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COVID-19 Relief Law - NY Force Majeure Upheld

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An auction house in NYC was well within its legal rights when it terminated an agreement to auction a painting by artist Rudolf Stingel in May 2020, according to New York district court judge. The court held that the COVID-19 pandemic and the resulting government shutdowns “fall squarely” under the contract’s force majeure clause.

The contract in question set forth a termination provision, which stated:

"In the event that the auction is postponed for circumstances beyond our or your reasonable control, including, without limitation, as a result of natural disaster, fire, flood, general strike, war, armed conflict, terrorist attack or nuclear or chemical contamination, we may terminate this Agreement with immediate effect.  In such event, our obligation to make payment of the Guaranteed Minimum shall be null and void and we shall have no other liability to you."

A U.S. District in the Southern District of New York dismissed the suit holding “The pandemic and the regulations that accompanied it fall squarely under the ambit of Paragraph 12(a)’s force majeure clause. That clause is triggered when the auction ‘is postponed for circumstances beyond our or your reasonable control.’”

Category: COVID-19 Relief Law

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