Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on April 14, 2022.
This is the third consecutive April in which my byline has filled this column space.
In April 2020, just weeks after Oregon Gov. Kate Brown formally ordered Oregonians to “Stay Home, Save Lives,” I asked whether construction projects could or should continue during the shutdown. While the order did not on its face require construction projects to halt, I offered the viewpoint that proceeding with ongoing or planned construction was not without impact or risk tied to COVID-19. While speculating that it was likely the governor’s order would remain in place “for several more weeks if not into the summer” – which in hindsight was quite optimistic – I provided a checklist for owners, designers and contractors to consider when deciding whether to continue a project or start a new one during the pandemic.
Then, in April 2021, I looked back at a year of practicing construction and design law during a pandemic. I reflected on a year spent negotiating, drafting, analyzing and haggling over force majeure provisions, while noting that prior to March 2020 I had never spent more than five minutes negotiating force majeure language in a construction or design contract. I also offered thoughts on other often overlooked contract clauses that took on renewed importance during the pandemic, including “change in law” provisions, and remarked on the importance of determining how various contract provisions and remedies triggered by the pandemic interact within the broader context of the whole contract. Finally, I provided a brief reminder that while the occurrence of a force majeure event such as a pandemic might allow for delayed or excused performance (or in some cases a monetary remedy), it will typically not excuse the obligation of the claiming party to provide notice or the performance of obligations not causally impacted by the event.
Now, 24 months after that first column and nearly 25 months since the governor issued her order, we might finally be emerging to see the ever so evasive light at the end of the tunnel. Social distancing and masking requirements have been removed from most settings, indoor dining has returned, students are back in school, and many of us have returned to the office.
But that does not mean that impacts from the pandemic are over. While the health risk appears to have somewhat retreated (for the time being at least – we now know well enough not to count our proverbial chickens), the realities of a world economy hampered by two-plus years of global pandemic remain. Supply chain issues, labor shortages and inflation have combined to create their own issues and may be felt more by the construction industry than any other. And there is not any sector of construction that seems to be spared.
On top of these ongoing reverberations from the pandemic, the Russian invasion of Ukraine is likely to pose further interruptions of global commerce. While it seems shallow-minded to focus on the global economic fallout of the atrocities carried out by the Russian military, it is also true that both Russia and Ukraine have sizable roles in global supply chains. Russia and Ukraine contribute raw materials, chemical products and various manufactured equipment to the global economy, and Russia of course supplies Europe with nearly a third of its oil and more than a third of its natural gas. Interruptions to these various supply chains are already felt and are likely to become only more pronounced as the war continues.
So, while much has changed since I penned the first column in 2020 and the second in 2021, the considerations for owners, designers and contractors with ongoing construction projects or those beginning new ones are in many ways the same, but with new twists. The focus for many parties has shifted from things like the impacts of government shutdown orders and social distancing mandates to whether ongoing supply chain interruptions or labor shortages are a result of the pandemic, the Ukraine war, or some other cause and whether they excuse performance or are otherwise subject to a contractual remedy.
As a construction and design attorney, if there is one thing that I emphasized to my clients over the past two-plus years it is that many of these questions cannot be answered with a one-size-fits-all solution. What might be an excusable or compensable event for one project may not be subject to a remedy for another project or even for a different contractor working on the same project. As we (hopefully) push further past the worst of the pandemic, and the pandemic-related impacts become more indirect and more intertwined with other global events like the war in Ukraine, this will likely prove to be even more true. Like I concluded in April 2021, I am confident that the experiences of the past two years leave the construction industry well prepared to face these new challenges.