Contracts and the Coronavirus: Force Majeure Clauses as an Excuse for Non-Performance

While my previous two posts on  Coronavirus-related issues have focused on non-contractual remedies, all of those remedies are generally superseded when the parties have entered into a contract containing an applicable force majeure clause excusing or otherwise modifying the performance due under the applicable circumstances.

1.      The Thing Speaks for Itself: The Specific Language of the Clause Controls

In construing force majeure clauses under New York law, courts will defer to whatever the contract at issue provides in terms of the scope of such a clause, how it is applied, and what its effect will be. Constellation Energy Servs. of N.Y., Inc. v. New Water St. Corp., 146 A.D.3d 557, 558 (1st Dept. 2017).  For example, if a force majeure clause contains a provision requiring notice, it must be followed precisely before the non-performing party can invoke force majeure, and a party failing to do so cannot avail itself of the defense. Vitol S.A., Inc. v. Koch Petroleum Grp., LP, No. 01-CV-2184, 2005 WL 2105592, at *11 (S.D.N.Y. Aug. 31, 2005); Gould Enter. Corp. v. Bodo, 107 F.R.D. 308, 313 (S.D.N.Y. 1985).  Similarly, as discussed below, while courts are generally reluctant to allow parties to use changes in their financial conditions or foreseeable events as predicates to trigger a force majeure clause, such actions are permissible if specifically allowed in the contract. See Four Points Shipping, Inc. v. Poloron Israel, L.P., 846 F. Supp. 1184, 1188 (S.D.N.Y. 1994); In re Old Carco LLC (f/K/A Chrysler LLC), 452 B.R. 100, 119 (Bankr. S.D.N.Y. 2011).  Conversely, while numerous courts have upheld force majeure clauses where government action makes performance impossible, a clause explicitly stating that such actions do not constitute force majeure will be upheld. See Chase Manhattan Bank v. Traffic Stream (BVI) Infrastructure Ltd., 86 F. Supp. 2d 244, 257 (S.D.N.Y. 2000) rev’d on other grounds 251 F.3d 334, 337 (2d Cir. 2001).

2.      But What the Heck Does it Say: Interpreting Force Majeure Clauses

When determining whether a force majeure clause has been invoked, New York courts interpret such clauses narrowly and will only excuse non-performance if the predicate event is specifically identified.  Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900, 902 (N.Y. 1987); Duane Reade v. Stoneybrook Realty, LLC, 2009 N.Y. Slip Op. 4348 (1st Dept. 2009).  Accordingly, in determining whether a force majeure clause applies, a court must first determine whether one of the triggering events in such a clause has occurred.   While this may be a relatively straightforward endeavor if a force majeure clause specifically references epidemics or governmental action, problems can arise where the clause contains catch-all language in addition to a list of specific events.  In considering whether such catch-all language applies, courts lean heavily on the concept of ejusdem generis, a canon of construction providing that words of excuse are only held to apply to events of the same general kind or class as those listed.  Team Marketing USA Corp. v. Power Pact, LLC, 41 A.D.3d 939, 942 (3d Dept. 2007). 

In assessing whether a force majeure clause applies, the party seeking to be excused has the burden of showing that a predicate event occurred and that it attempted to overcome the event if possible to do so. Phillips Puerto Rico Core, Inc., v. Tradax Petroleum, Ltd, 782 F.2d 314, 318 (2d Cir. 1985); Beardslee v. Inflection Energy, LLC, 904 F. Supp. 2d 213, 220 (N.D.N.Y. 2012).  These issues are questions of fact that, if subject to bona fide dispute, may only be resolvable at trial. Goldstein v. Orensanz Events LLC, 44 N.Y.S.3d 437, 438 (1st Dept. 2017); Phibro Energy, Inc. v. Empresa De Polimeros De Sines Sarl, 720 F. Supp. 312, 319 (S.D.N.Y. 1989).

3.      What’s Been Said Before: Trends in Enforcement

Turning to some general principles, with the caveat that the specific language of the contract controls, some trends in the enforcement of these clauses can be discerned.  For example, courts are generally unwilling to allow force majeure clauses to be invoked when the predicate event was within the control of the party seeking to be excused.  Goldstein, 44 N.Y.S.3d at 438; Macalloy Corp. v. Metallurg, Inc., 284 A.D.2d 227 (1st Dept. 2001); Constellation Energy Servs. of N.Y., Inc. v. New Water St. Corp., 2016 N.Y. Slip Op. 30470(U) (Sup. Ct., N.Y. Cty. 2016). In the case of Coronavirus claims, while the epidemic itself and the governmental reaction to it are likely outside of a party’s control, it should be noted that voluntary shutdowns due to financial conditions have been deemed insufficient to invoke force majeure unless the clause at issue explicitly includes changes in financial conditions as a predicate event.  Macalloy, 228 A.D.2d at 227; U.S. v. Panhandle Eastern Corp., 693 F. Supp. 88, 95-96 (D. Del. 1988)(applying N.Y. law).  However, acceding to informal means of governmental suasion rather than insisting on the formal invocation of the Defense Production Act or other regulations is not considered to be a voluntary act, and is likely sufficient to trigger a force majeure clause. See NFL Enterprises LLC v. Echostar Satellite L.L.C., 2008 N.Y. Slip Op. 31389(U) (Sup. Ct., N.Y. Cty. 2008) see also Eastern Air Lines, Inc. v. McDonnell Douglas Corp., 532 F.2d 957 (5th Cir. 1976). 

Similarly, barring specific language to the contrary, the predicate event triggering a force majeure clause must not be foreseeable at the time of contract.  Macalloy, 284 A.D.2d at 227; Phibro Energy, 720 F. Supp. at 317.  In the case of Coronavirus-related issues, it may be more difficult to successfully invoke force majeure clauses in contracts signed once the depths of the crisis became apparent. In addition, if the force majeure event is not the Coronavirus itself but the associated economic downturn, it is again less likely that that will be upheld as a predicate event, since economic downturns are generally considered to be foreseeable events. Urban Archaeology Ltd. v. 207 E. 57th St. LLC, 34 Misc. 3d 1222 (Sup. Ct., N.Y. Cty. 2009).

4.      Conclusion

In assessing whether a force majeure clause applies, the main issue is the specific language of that clause, as the courts will give full force and effect to its provisions. To the extent that the language of the clause is ambiguous, the courts will interpret it narrowly with a focus on whether the predicate event is set forth within the clause.  That said, a party is more likely to successfully invoke a force majeure clause when the predicate event was not within its control and was unforeseeable.

The Coronavirus Ate My Homework: Impossibility And Frustration Of Purpose As Excuses For Non-Performance

In my previous post, I discussed the extent of situations where the Coronavirus crisis might excuse non-performance of contracts for the sale of goods under U.C.C. § 2-615. However, even in situations where U.C.C. § 2-615 does not apply, a party faced with contractual obligations dramatically affected by the Coronavirus crisis might still be able to have its performance excused under the doctrines of impossibility or frustration of purpose.[1]

1.      Impossibility

The doctrine of impossibility is limited in its scope, excusing performance only when a supervening event makes fulfilling the contract objectively impossible. Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900, 902 (1987).  The doctrine is narrowly construed, as financial hardship alone is insufficient to invoke this defense, even if performing the contract would drive the affected party into insolvency or bankruptcy. 407 E. 61st Garage v. Savoy Corp., Inc., 23 N.Y.2d 275, 281 (1968); Urban Archaeology Ltd. v. 207 E. 57th Street LLC, 891 N.Y.S.2d 63 (1st Dept. 2009); General Elec. Co. v. Metals Resources Group, Ltd., 293 A.D.2d 417 (1st Dept. 2002).

Moreover, the predicate event triggering the impossibility defense must be one that the parties were unable to foresee when entering into the contract.  Kel Kim, 70 N.Y.2d at 902. When determining whether a predicate event was foreseeable, courts will take the sophistication of the parties into consideration.  See, e.g., Four Asteria Realty, LLC v. BCP Bank of North America, 71 A.D.3d 822 (2d Dept. 2010); Pleasant Hill Developers, Inc. v. Foxwood Enter., LLC, 65 A.D.3d 1203 (2d Dept. 2009).  Accordingly, courts considering impossibility claims will likely need to assess the circumstances surrounding the contract, especially its timing relative to the Coronavirus crisis, as well as whether the contract contained cancellation or similar clauses that arguably anticipated that events disrupting performance may occur, with sophisticated, global businesses getting less of the benefit of the doubt than unsophisticated, locally-focused ones.

The specific nature of the predicate event also matters. Government action, such as orders shutting down “non-essential” businesses, can serve as a predicate for an impossibility defense.  Kolodin v. Valenti, 979 N.Y.S.2d 587, 590 (1st Dept. 2014); A&S Transp. Co. v. Cty. of Nassau, 154 A.D.2d 456, 459 (2d Dept. 1989); Metpath v. Birmingham Ins. Co., 86 A.D.2d 407, 413 (1st Dept. 1982); Moyer v. City of Little Falls, 134 Misc. 2d 299, 302 (Sup. Ct., Herkimer Cty. 1986).[2]  On the other hand, courts have generally been reluctant to find that economic downturns are unforeseeable.  See, e.g., Urban Archaeology, 891 N.Y.S.2d at 63.  Accordingly, a contract rendered impossible as a direct result of governmental actions is more likely to be excused under this defense than one rendered impossible because of the economic disruptions resulting from the Coronavirus.

The length of the Corornavirus-related disruption is also a key factor in assessing the defense.  Where the predicate event creates a temporary impossibility of brief duration, the impossibility may be viewed as only excusing performance until it is possible to perform rather than excusing it all together. Bank of Boston Intern. v. Arguello Tefel, 644 F. Supp. 1423, 1427 (E.D.N.Y. 1986); Bush v. Protravel Int’l, Inc., 746 N.Y.S.2d 790 (Civ. Ct., Richmond Cty. 2002).  However, when the predicate event makes performance impossible for a long or uncertain period, then performance may be excused entirely.  Leisure Time Travel, Inc. v. Villa Roma Resort & Conference Ctr., Inc., 52 N.Y.S.3d 621, 623 (Sup. Ct., Queens Cty. 2017).  While it is likely that Coronavirus-related shutdowns will be of limited duration, assessing whether the Coronavirus will lead to a contract being considered temporarily or permanently impossible will probably turn on an assessment of the nature and purpose of the contract.

Finally, it should be noted that successfully invoking the defense of impossibility will likely not result in a windfall for the avoiding party, as it will need to return any benefit received under the doctrine of restitution.  University of Minn. v. Agbo, 176 Misc. 2d 95, 26 (2d Dept. 1998); Metpath, 86 A.D. 2d at 413.

2.     Frustration of Purpose

Even if impossibility is not an available defense to a contracting party because it may still be able to physically perform its obligations under the contract, it may still be able to avoid performing in situations where the Coronavirus crisis has destroyed the rationale for entering into the contract in the first place.  In such situations, pointless performance may be excused on the grounds of frustration of purpose.

In order to invoke frustration of purpose, “the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense.” PPF Safeguard, LLC v. BCR Safeguard Holding, LLC, 85 A.D.3d 506, 508 (1st Dept. 2011).  This doctrine is narrowly construed and can only be applied in situations where the purposes of the contract have been substantially frustrated, to the point that the transaction is unintelligible without the frustrated purpose.  See, e.g., Ahrons v. Charpentier, 36 A.D.3d 636 (2d Dept. 2007); Crown IT Services, Inc. v. Koval-Olsen, 11 A.D.3d 263, 264 (1st Dept. 2004). As the name implies, the key inquiry in determining whether frustration of purpose applies is what the actual purpose of the contract was.  In general, courts will examine the language and structure of the contract, using traditional principles of contract interpretation, in order to determine its purpose. In re Fontana D’Oro Foods, Inc., 65 N.Y.2d 886 (1985).  To the extent that the specific purpose of the contract cannot be readily ascertained, the doctrine cannot be applied.  E-Pass Techs. v. Moses & Singer, LLP, No. C-09-5967 EMC (N.D. Cal. Apr. 13, 2012) (applying N.Y. law).  For Coronavirus-related claims, contracts entered into for a specific purpose that no longer makes sense, such as providing services for a now-cancelled event, are likely subject to this doctrine, while more general contracts are less likely to be covered.

Frustration of purpose is subject to some of the same constraints as the impossibility doctrine.  For example, frustration of purpose does not apply in situations where changed circumstances merely makes performance less profitable or even if the avoiding party would suffer a loss by performing.  Rockland Dev. Associates v. Richlou Auto Body, Inc., 173 A.D.2d 690, 691 (2d Dept. 1991).   Frustration of purpose also cannot be invoked in situations where the frustrating event was foreseeable. U.S. v. General Douglas MacArthur Senior Village, Inc., 508 F.2d 377, 381 (2d Cir. 1974); Gander Mountain Co. v. Islip U-Slip LLC, 923 F. Supp. 2d 351, 360 (N.D.N.Y. 2013); Warner v. Kaplan, 71 A.D.3d 1,6 (1st Dept. 2009).    As with impossibility, the sophistication of the parties is taken into account in evaluating whether the event was foreseeable.  Gander Mountain, 923 F. Supp. 2d.  A party invoking frustration of purpose is also subject to the obligation to make restitution for the benefits it has already received. D & A Structural Contrs. Inc. v. Unger, 2009 N.Y. Slip Op. 52026(U) (Sup. Ct., Nassau Cty. 2009).

3.      Conclusion

For contracts that can no longer be performed at all, the doctrine of impossibility may excuse performance, while contracts that can technically be performed but the reasons for doing so no longer exist may be excused due to frustration of purpose.  For either defense to apply, however, the party seeking to be excused performance must show more than mere financial hardship and lack of foreseeability of the events leading to non-performance.

[1] Notably, this discussion presumes that the contract at issue either does not contain a force majeure clause or the clause does not apply.  Legal issues regarding force majeure clauses will be addressed in a subsequent post.

[2] However, as with any predicate event, the government action in question must be unforeseeable at the time of making the contract in order to invoke an impossibility defense. RW Holdings, LLC v. Mayer, 17 N.Y.S.3d 171, 173 (2d Dept. 2015); Inter-Power of N.Y. v. Niagara Mohawk Power, 208 A.D.2d 1073 (3d Dept. 1994); A & S Transp., 154 A.D.2d 459.  **

Coronavirus and Commercial Impracticability:An Analysis of U.C.C. § 2-615

As the Coronavirus crisis of 2020 has led to the voluntary or mandatory shutdown of innumerable businesses, it is likely that many companies have orders for the sale of goods that they either can no longer fulfill or that can only be fulfilled at exorbitant cost.[1] In such cases, rather than face liability for breaching its contracts, the seller’s performance may be excused in situations that meet the requirements of Section 2-615 of New York’s Uniform Commercial Code (the “U.C.C.”).

1.      U.C.C. § 2-615(a): Is The Seller Off The Hook?

For contracts for the sale of goods governed by the U.C.C., Section 2-615 will excuse a seller from performance of its contractual obligations when such performance has been rendered impracticable by either (a) unforeseen and uncontracted-for contingencies or (b) supervening foreign or domestic governmental regulations.  U.C.C. § 2-615(a).  In either event, the test is whether the delivery of goods has become impracticable because of unforeseen supervening circumstances that were not within the contemplation of the parties when the contract was formed.  U.C.C. § 2-615, cmt. 1. 

The first of these tests excuses a seller from performance where it can show the existence of (1) a contingency (2) the impracticability of performance as a consequence of the occurrence of that contingency, and (3) that the nonoccurrence of the contingency was a basic assumption of the contract. See Dell's Maraschino Cherries Co. v. Shoreline Fruit Growers, Inc., 887 F. Supp. 2d 459 (E.D.N.Y. 2012). The official comments to Section 2-615 list as examples of possible contingencies: “a severe shortage of raw materials or of supplies due to a contingency such as war, embargo, local crop failure, unforeseen shutdown of major sources of supply or the like, which either causes a marked increase in cost or altogether prevents the seller from
securing supplies necessary to his performance.”  U.C.C. § 2-615.  Performance under this doctrine will only be excused when it can only be done at extreme and unreasonable cost. See Asphalt Intern., Inc. v. Enterprise Shipping Corp., 667 F.2d 261, 266 (2d Cir. 1981) (applying maritime law but incorporating UCC §2-615 by analogy); Transatlantic Fin. Corp. v. U.S., 363 F.2d 312 (D.C. Cir. 1966).  However, mere financial hardship is not sufficient to excuse performance. See Rochester Gas Electric Corporation v. Delta Star, Case No. 06-CV-6155-CJS-MWP, 2009 WL 368508 (W.D.N.Y. Feb. 13, 2009); Maple Farms v. City Sch. Dist., 76 Misc. 2d 1080, 1083 (Sup. Ct., Chemung Cty. 1974) see also U.C.C. § 2-615, cmt. 4.

In addition, if the hardship was foreseen by the parties, the doctrine of impracticablilty will not apply.  See, e.g., Kel Kim Corp. v. Central Markets, Inc., 70 N.Y.2d 900, 902 (1987); U.S. v. Brooks-Callaway Co., 318 U.S. 120, 122-23 (1943); Ahlstrom Machinery, Inc. v. Associated Airfreight, Inc., 251 A.D.2d 852, 853 (3d Dept. 1998).  For example, if the contract between the parties include a force majeure clause specifically or impliedly covering epidemics, the terms of that contractual provision would control instead of the U.C.C.  Similarly, companies that continued accepting orders as it became foreseeable that the Coronavirus would create considerable economic disruption may not be able to invoke the protections of Section 2-615. See Cliffstar Corp. v. Riverbend Prods., 750 F. Supp. 81, 84 (W.D.N.Y. 1990) citing Roth Steel Prods. v. Sharon Steel Corp., 705 F.2d 134, 149-50 (6th Cir. 1983).

Turning to the second prong of the UCC 2-615(a) test, the imposition of governmental regulations is an excuse to performance if it both renders performance genuinely impractical and was unforeseen at the time of contracting.  See, e.g., Matter of A S Transp. Co. v. Cty. of Nassau, 154 A.D.2d 456, 459 (2d Dept. 1989); Moyer v. City of Little Falls, 134 Misc. 2d 299, 301 (Sup. Ct., Herkimer Cty. 1986) see also Barton Windpower, LLC v. N. Ind. Pub. Serv. Co., 13-cv-5329 (N.D. Ill. June 18, 2018) (applying N.Y. law). 

For example, regulations that would render performance illegal would excuse the seller, assuming they were not foreseen at the time the contract was entered into.  See, e.g., Matter of Kramer Uchitelle, Inc., 288 N.Y. 467, 471 (1942); Boer v. Garcia, 240 N.Y. 9, 16 (1925).  Similarly, regulations that supersede existing contracts and require goods to be sold at the government’s direction would also constitute an excuse if unforeseen. Nitro P. Co. v. Agency of C.C. and F. Co., 233 N.Y. 294 (1922); Mawhinney v. Millbrook Woolen Mills, 231 N.Y. 290 (1921). 

Accordingly, it is likely that a court addressing recent regulations such as N.Y. Executive Order 202.6, which required the closure of various “non-essential” businesses, would conclude that the affected businesses had a valid excuse for non-performance.[2]

Similarly, non-performance of contracts for the sale of goods that were superseded by the invocation of the Defense Production Act, 50 U.S.C. §§4501 et seq. or other legal provisions, is also likely excusable.  There are, however, two possible caveats to that analysis.  First, if a seller was found to have caused or colluded in the government action preventing performance, then this excuse would not apply, which may present problems for companies that affirmatively request that the Defense Production Act apply to them in order to supersede existing contractual obligations. MG Refining & Marketing, Inc. v. Knight Enterprises, Inc., 25 F. Supp. 2d 175 (S.D.N.Y. 1998); Cliffstar Corp. v. Riverbend Products, 750 F. Supp. 81, 84 (W.D.N.Y. 1990) citing Roth Steel Products v. Sharon Steel Corp., 705 F.2d 134, 149-50 (6th Cir. 1983). Second, performance is not excused if the supervening regulation was foreseeable, which may create some ambiguity regarding contracts entered into after the start of the Coronavirus crisis.

2.      U.C.C. § 2-615(b): How Should Goods Already Produced Be Allocated?

If, despite commercial impracticability, a seller is able to produce some, but not all, of the contracted-for goods, Section 2-615(b) requires that the seller allocate production and delivery between existing customers, regular customers not then under contract, and their own manufacturing requirements in a fair and reasonable manner.  U.C.C. § 2-615(b).  As the official comments to Section 2-615 explain, this section is intended to provide “reasonable business leeway” to sellers in order to determine a fair and reasonable method of allocation.

Courts in New York have not had much opportunity to address whether allocations under Section 2-615(b) are fair and reasonable, and the courts which have looked at this issue have generally found that whether an allocation is reasonable is a question of fact for the jury. See, e.g., Cliffstar Corp., 750 F.Supp. at 87.  In general, courts in other jurisdictions have upheld allocation schemes where goods were distributed according to objective, consistently applied criteria, such as prior sales volume.  See, e.g., Cecil Corley Motor Co., Inc. v. General Motors Corp., 380 F. Supp. 819 (M.D. Tenn. 1974); Intermar, Inc. v. Atlantic Richfield Company, 364 F. Supp. 82, 99 (E.D. Pa. 1973). It can be permissible to include subsidiaries and affiliates in an allocation scheme assuming that they already either had contracts to receive goods and
were regular customers and were not given favorable treatment over other customers under the allocation criteria the seller determined.  See Intermar, 364 F.Supp. at 99.

On the other hand, courts have generally been skeptical of allocation schemes that can be characterized as unfair self-dealing.  See, e.g, Chemetron Corp. v. McLouth Steel Corp., 381 F. Supp. 245 (N.D. Ill. 1974); Haley v. Van Lierop, 64 F. Supp. 114, 116 (W.D. Mich. 1945), Courts have rejected allocation schemes that include parties other than customers with existing contracts or regular customers, such as new customers or newly formed subsidiaries.  See, e.g., Roth, 705 F.2d at 151.  Allocation schemes that completely cut out certain disfavored buyers have also been found to be unreasonable. Cosden Oil & Chemical Co. v. Karl O. Helm Aktiengesellschaft, 736 F.2d 1064 (5th Cir. 1984). 

3.     U.C.C. § 2-615(c):  How Quickly Must Customers Be Told The Bad News?

Finally, Section 2-615 requires that sellers “seasonably” notify buyers that there will be delay or non-delivery and, in the event that there will be an allocation of goods under Section 2-615(b), the quota of goods available to the buyer. U.C.C. § 2-615(c).  “Seasonable” is defined in U.C.C. as an action undertaken within a reasonable time depending on the nature, purpose and circumstances of that action.  U.C.C. § 1-205.  The U.C.C. does not specify a form that this
notice must take, just that the seller take such steps as reasonably required to inform the buyer in the ordinary course of business.  U.C.C. § 1-202(d).

While I am not aware of any New York courts that have ruled upon what seasonable notice is in the context of Section 2-615, most courts that have considered similar requirements in other provisions of the U.C.C. have tended to treat the question of whether an action was done seasonably as a question of fact to be determined by the jury. See, e.g., Sherkate Sahami Khass Rapol v. Henry R. Jahn & Son, Inc., 701 F.2d 1049, 1051 (2d Cir. 1983).  However, courts will determine what constitutes a reasonable time before trial when the facts will admit of only one inference. Tabor v. Logan, 114 A.D.2d 894 (2d Dept. 1985).   Among the factors courts have considered in other contexts that may be relevant to disputes under Section 2-615(a) are whether the goods at issue were subject to rapid fluctuations in price and whether the aggrieved party was substantially prejudiced by the delay in notice.  See, e.g., Simply Natural Foods LLC v. Polk Mach. Co., Case No. 11-CV-3911(JS)(SIL), 2015 WL 5599152 (E.D.N.Y. Sep. 22, 2015); Levin v. Gallery 63 Antiques Corp., Case No. 04-CV-1504 (KMK), 2006 WL 2802008, (S.D.N.Y. Sep. 28, 2006).

4.     Conclusion

For companies faced with contracts for the sale of goods that they are unable to fulfill due to Coronavirus-related disruptions, they may be excused performance under U.C.C. § 2-615 if they can show that performing is either commercially impracticable or prohibited under
governmental mandates and that the disruption was not foreseeable.  In addition, for companies that can partially fulfill orders, they must allocate goods between customers in a fair and reasonable manner, ideally in accordance with objective and consistently
applied criteria.  Finally, companies wishing to invoke U.C.C. § 2-615 must notify customers within a reasonable time, with prompt notification especially necessary if the goods in question are subject to rapid fluctuations in price of if counterparties are likely to be substantially prejudiced by delay.

[1] This blog post only addresses contracts for the sale of goods.  Other contracts are governed by a somewhat different legal regime, which will be addressed in a subsequent post.

[2] With the possible exception of contracts entered into shortly before the issuance of Executive Order 202.6, when it arguably became foreseeable.