Force majeure: implications on continuity of service delivery through procurement and public private partnerships in uncertain times

Abstract

Procurement and PPPs have been adopted as a medium of engaging the private sector through contracts and concessions to deliver public services. The force majeure clause has been included in procurement and PPP contracts to limit liability in the event that parties are frustrated for serving their obligations. This study reveals that while the force majeure clause exists in contracts, it requires that parties cite the events that shall constitute force majeure. Based on a review of literature, the study reveals that while COVID-19 was not catered for, it is largely confirmed a pandemic alongside its associated lockdowns. The findings reveal that COVID-19 measures constitute a force majeure event that exposes procurement and PPPs contracts to frustration. However, unlike other force majeure events we recommend that termination due to frustration should be a last resort option due to switching costs and risks especially for the government. This study provides for contract continuity alternative actions that are necessary for continuity of service delivery in existing procurement and PPP contracts in the uncertain COVID-19 times. Copyright © 2021 Inderscience Enterprises Ltd.