Purchaser wants contract for manufacture and sale of large quantities of CBD oil terminated on account of COVID-19-related state emergency orders, but that’s not what the force majeure clause says.
In a contract the dispute over whether a contract exists and whether payment for the processing and production of winterized CBD oil is due, the two parties, a buyer and a seller exchanged correspondence with the seller threatening to take the buyer to court if the seller wasn’t paid. Seeing the writing on the wall, the Kentucky buyer went to court before the Oregon seller and filed a lawsuit seeking to declare the $9MM contract invalid arguing it rested on a condition precedent which required the buyer to raise $2MM in capital and that the hemp oil needed to meet certain quantities and specifications, neither of which occurred.
In addition to looking to invalidate the agreement on account of the lack of a condition precedent (the capital raise not happening) the buyer also plead that this provision in the agreement:
4.3 Force Majeure. In the event of riot, war, rebellion, fire flood, act of God, terrorism, act of governmental authorities or any other cause beyond the control of the Parties hereto which renders it impossible for either Party to comply with the terms of this Agreement (a “Force Majeure Occurrence”), there shall be no liability for non-compliance caused thereby during the continuance thereof and any additional period of time reasonably necessary to remediate the effect of such Force Majeure Occurence.
when combined with the spread of the coronavirus and the emergence declared by the Governor’s executive order rendered the contract unenforceable and requested that the agreement be rescinded or terminated on account of the emergency declaration. Apparently in spite of the provisions language stating that additional time is the remedy under the Force Majeure provision, not termination or rescission.