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The COVID-19 pandemic has affected the art world in many ways, including making it difficult, if not impossible, for art businesses to meet their contractual obligations. To protect their bargaining position, many auction houses include a force majeure provision in their agreements which, depending on its phrasing, may allow one or both parties to terminate the agreement upon the occurrence of a force majeure event as defined within the agreement. Does COVID-19 constitute a “natural disaster” to invoke the force majeure clause? One federal district court recently said that it does, at least in the context of the agreement between the parties.
Finding in favor of Phillips Auctioneers LLC (Phillips), Hon. Denise Cote of the Southern Distri...
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