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Virus-hit Chinese businesses seek relief with 'act of God' clause

Work stoppages prompt 100 companies to push for release from contract obligations

A worker disinfects a factory in Lianyungang, China, that remained shut down due to the coronavirus outbreak.   © Reuters

SHANGHAI -- Nearly 100 Chinese businesses have been certified to invoke force majeure exemptions from contractual duties by a government trade council that deems the coronavirus outbreak as a qualifying disaster.

Under Chinese law, force majeure -- or act of God -- provisions are usually declared in the event of war, natural disaster, or intervention by state authorities. Commercial contracts generally contain such clauses, and if those conditions are met, a company is exempt from delivering goods or paying invoices, among other previously agreed-upon obligations.

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