Contracts Capsized by COVID-19: A Legal and Jewish Ethical Analysis

• Published in: Journal of business ethics Vol. 178; no. 2; pp. 403 - 413
• Main Authors: Rashi, Tsuriel, Schwartz, Andrew A.
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer Netherlands 01.06.2022; Springer Nature B.V
• Subjects: Breaches; Business and Management; Business Ethics; Concerts; Contracts; Coronaviruses; COVID-19; Education; Ethics; Jewish life & ethics; Law; Management; Original Paper; Pandemics; Philosophy; Quality of Life Research; COVID-19; Contract law; Jewish ethics
• ISSN: 0167-4544; 1573-0697
• DOI: 10.1007/s10551-021-04773-9

Countless contracts have been undermined by the COVID-19 pandemic of 2020 as well as government orders to contain it. Flights have been canceled, concerts have been called off, and dorms have been closed, just to name a few. Do these all count as breaches of contract—or are the parties excused due to the extraordinary circumstances? And how should the losses be allocated between the parties? The law provides one set of answers to these questions; ethics offers another. With a focus on American law (developed over the past two centuries) and Jewish ethics (developed over millennia), this paper shows that the two systems are in accord with some respects and differ in others: Both law and Jewish ethics would excuse a party who cannot complete his contract due to a force beyond his control, like the COVID-19 pandemic. Yet Jewish ethics would require that the excused party still be paid, while American law would not.