Can a contract be put on hold or terminated due to lockdown?

While the coronavirus has taken its toll on the people, the businesses are put through various challenges as well. One such challenge is performing contractual obligations during lockdown imposed to prevent COVID-19 spread. Parties to a contract may seek to delay or avoid their responsibilities under the contract, either because the lockdown has legitimately prevented them from performing their contractual obligations, or because they are seeking to use it as an excuse to free themselves from an unfavorable deal. However, whether the contract can be put on hold or terminated would depend upon the terms of the contract.

Some of the contracts contain provisions stating that it can be put on hold until the force majeure event is resolved. Moreover, some contracts also provide for limitations in time after which either party may cancel the agreement with written notice to the other. However, if a contract does not contain provisions especially stating any of these situations, the contract will remain in effect until the force majeure event is resolved.