Force Majeure – The Little Clause That Could

[The following is a guest post from Molly Madonia, Law ’16, a prior guest alumni contributor to the Blog.]

What do the great Beyoncé Knowles and force majeure clauses have in common? They both demand that we put some respect on their check.

Force majeure clauses in transactional agreements have often been used arbitrarily, perhaps as a legalese-y afterthought, as an easy exit from the contract, or even added merely to shift the signature blocks onto the proceeding page. However, in the time of an international pandemic, unpredictable supply chain, and abundant contractual frustration of purpose, force majeure clauses are finally getting their time to shine. Now, these often-tertiary little provisions are single-handedly keeping businesses afloat, keeping creditors at bay, and punching well-above their weight class across all types of contracts.

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Enforcing Environmental Laws During The Pandemic

According to basic economic theory, regulated entities will comply with the environmental laws when the expected benefits of doing so (most The Environmental Protection Agency logoprominently, avoiding penalties) outweigh the expected costs of compliance. Theoretically, economists say, there is an optimum level of enforcement where expected sanctions equal expected harm, taking into account the probability that violations will be detected.

Yet the actual level of enforcement of the environmental laws is never optimal, even at the best of times. Enforcement agencies such as the United States Environmental Protection Agency (EPA) and its state counterparts like the Wisconsin Department of Natural Resources (DNR) have imperfect information about ongoing violations. They are not omniscient. And even if they had perfect information, there are often many more potential enforcement targets than can be pursued with limited agency resources. Enforcement, of course, is part of a broad mix of agency responsibilities that also includes rulemaking, standard setting, monitoring, and many other activities. Finally, political leaders may appoint agency heads who drive the pursuit of more or less than the optimal enforcement level.

Enter the pandemic. It adds a new layer of complexity, to understate the matter, in that enforcement agencies must take several new and highly important factors into account, such as the safety of agency personnel and the economic damage some regulated entities are experiencing. Staff who might normally be inspecting permitted facilities or investigating reported violations may be sick, quarantined, or at the very least, working from home. These factors have led some agencies to relax enforcement activities, as discussed in more detail below. Even if they are presumed to be well-meaning, such policies may worsen the situation in communities already disadvantaged by pollution levels that seriously impact public health. In turn, this may expose those communities to additional risks during or following the pandemic.

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Student Lessons on Distance Mediation

Picture of person hanging up a telephone“Could we try and mediate over the phone?” I was a bit surprised by the response from the attorney when I called to let him know that the Small Claims Mediation Clinic’s courthouse mediation options had been curtailed by the Coronavirus. The Clinic, which was started by former Wisconsin Supreme Court Justice and retired MULS Professor Janine Geske, has been in operation since 1998. A typical Clinic day revolves around same day referrals for mediation cases from Court Commissioners in Room 400 of the Milwaukee County Courthouse. Cases are mediated then and there. In addition to the typical same-day referrals, this semester the Clinic received a number of referrals from judges dealing with civil cases. This particular case, a dispute between relatives, seemed tailor-made for mediation. I hesitated for just a second before saying yes, we would try mediating the case by phone.

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