Key Provisions of the CARES Act Impact Health Care Providers
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law March 27, 2020. While the foundation of the Act economically supports individuals, small businesses and industries hard hit by COVID-19, key provisions directly affect the health care industry. Providers should be aware of the information found here.
The Coronavirus Response Act and What Employers Need to Know
On March 18, 2020, the Families First Coronavirus Response Act was signed into law. The Act covers many aspects of the federal government’s response to the COVID-19 pandemic. In part, it ensures paid leave for workers who are infected or who are caring for a family member with the virus. The Act is effective from April 1 until Dec. 31, 2020, and contains several key provisions that will likely impact employers. This includes emergency paid sick leave, an emergency Family and Medical Leave expansion, and coverage changes for health insurers. A summary can be found here.
Coronavirus and Contract Cancellations
We are already seeing situations where businesses cannot meet their contractual obligations because of the COVID-19 pandemic. One of the things businesses should consider is whether their failure to perform is legally excused.
Written contracts often have provisions that excuse performance in the event of unforeseen, intervening circumstances. Sometimes they may appear as “Force Majeure” clauses or be associated with terms like “Impossibility.” Words and phrases in these provisions may include “governmental action,” “Acts of God,” “disaster,” “emergencies” or similar language. Contract language is important, and businesses should determine whether their contracts might cover a situation like the current pandemic. For example, an official declaration of a state of emergency or a disaster might trigger a contract defense.
Applicable state law, whether your contract is written or oral, may also provide a defense to a claim of breach of contract for impossibility or impracticability. In Virginia for example, a 2018 Supreme Court decision reaffirms the availability of the “impossibility of performance” defense and applies it to a contract dispute.
We are observing that parties in commercial relationships are bending over backwards to accommodate each other, as we are all in this together. Nonetheless, remain aware of contractual rights and obligations, including notices of cancellation that may be required if you are prevented from performing by the virus.
The following Christian & Barton attorneys were selected for inclusion on the 2020 Virginia Super Lawyers list: Peter E. Broadbent Jr. (intellectual property); S. Perry Coburn (business litigation); Christopher M. Gill (real estate); Michael C. Guanzon (business/corporate); W. David Harless (business litigation); R. Braxton Hill IV (business litigation); Belinda D. Jones (civil litigation defense); Jonathan M. Joseph (health care); David B. Lacy (general litigation); Roman Lifson (civil litigation defense); Craig T. Merritt (business litigation); Michael W. Smith (business litigation); E. Ford Stephens (insurance coverage); and Henry I. Willett III(civil litigation defense). In addition, Robert D. Michaux was named to the 2020 Virginia Rising Stars list in the business litigation category.
This has been provided as an informational service and does not constitute legal counsel or advice, which can only be rendered in the context of specific factual situations. If a legal issue should arise, please contact an attorney listed or retain the assistance of other competent legal counsel. Case results depend on a variety of factors unique to each case and results do not guarantee or predict a similar result in any future case undertaken.