Legal Problems Arising out of Highway Programs. Topic 26-04. Pandemics and Contractual Issues

During the COVID-19 pandemic, many transportation departments and authorities and their contractors and consultants looked to the force majeure provisions of their contracts to determine what conditions or terms would govern their performances; what risks and obligations would be upheld; and what potential waivers would apply. The purpose of this project is to research the legal impacts that transportation agencies can expect to have as a result of an extremely unusual occurrence when the nature of the occurrence (e.g., a pandemic) is not specifically identified in contractual force majeure provisions; and the sufficiency or reasonableness of consequences for noncompliance with contract performance levels and with risk transfers. The objective of this research is to produce a legal research digest that addresses the following questions: (1) What are typical force majeure provisions and conditions in transportation construction, maintenance or toll road operation contracts? How did they apply to government mandated and imposed quarantine and business disruptions caused by the 2020/21 COVID-19 pandemic? a. If force majeure clauses do apply, what are the key criteria and circumstances that weighed in favor of the conclusion that force majeure applies? b. If force majeure clauses do apply, what performance, time of completion, and financial provisions in the contracts are affected for each side (i.e., the transportation agency and the contractor) and how would these provisions be affected? c. If a contractor asserts or could assert force majeure as a basis for non-compliance with performance or financial provisions in a transportation contract, what defenses or remedies could a transportation agency assert to counter the claim of force majeure? d. If a transportation agency asserts or could assert force majeure, and a contractor opposes the application of force majeure, what are the best legal arguments to make in support of the declaration of force majeure? (2) If the force majeure clause do not apply or fails to assert “pandemic”, what other language could be interpreted to be inclusive of a pandemic? a. If a transportation contract for construction, maintenance or operation of a transportation facility has no force majeure clause, and either a transportation agency or a contractor has a physical or financial shortfall in performance under the contract, how would the cost of the shortfalls be allocated to each side in the absence of the force majeure clause?

Language

  • English

Project

  • Status: Proposed
  • Funding: $100000
  • Contract Numbers:

    Project 20-06, Topic 26-04

  • Sponsor Organizations:

    National Cooperative Highway Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC  United States  20001

    American Association of State Highway and Transportation Officials (AASHTO)

    444 North Capitol Street, NW
    Washington, DC  United States  20001

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590
  • Project Managers:

    Chisholm-Smith, Gwen

  • Start Date: 20220412
  • Expected Completion Date: 0
  • Actual Completion Date: 0

Subject/Index Terms

Filing Info

  • Accession Number: 01787210
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: Project 20-06, Topic 26-04
  • Files: TRB, RIP
  • Created Date: Nov 1 2021 3:23PM