What is Force Majeure? Definition
Force majeure is a contract clause that is included in contracts in order to remove liability from both parties in the event of an extraordinary event or circumstance beyond their control. The purpose of this clause is to protect both parties in the event that something happens that prevents either party from being able to fulfill their obligations under the contract. Some examples of force majeure events include: natural disasters, war, terrorist attacks, and pandemics. While this clause is included in many contracts, it is often misunderstood. In this blog post, we will explore what force majeure is and how it can be used.
What is Force Majeure?
A force majeure event is an unforeseeable, external event that prevents one or more parties from fulfilling their obligations under a contract. Force majeure events are typically outside of the parties’ control and include natural disasters, wars, terrorist attacks, and pandemics.
While force majeure clauses vary from contract to contract, they typically excuse a party’s non-performance if the force majeure event makes it impossible or impractical to perform. For example, if a hurricane damage’s a party’s factory, that party may be excused from performing under the contract.
If you’re drafting a contract, it’s important to consider what types of events should be classified as force majeure. You’ll also want to decide how long the excuse from performance should last and whether either party can cancel the contract if the force majeure event persists for a certain period of time.
Types of Force Majeure
A force majeure is an event or circumstance that prevents someone from fulfilling a contract. Common examples of force majeure events include natural disasters, war, terrorist attacks, and pandemics.
There are four main types of force majeure:
1. Natural disasters – These are events like floods, hurricanes, earthquakes, and wildfires that are out of our control and can damage property or disrupt transportation and other essential services.
2. War – This can refer to both international and civil wars that make it difficult or impossible to fulfill contractual obligations.
3. Terrorist attacks – These events can seriously disrupt normal life and prevent people from being able to meet their contractual obligations.
4. Pandemics – A pandemic is a disease outbreak that affects a large number of people across the globe. The recent outbreak of COVID-19 is an example of a pandemic that has forced many businesses to close their doors temporarily.
The Impact of Force Majeure
“The Impact of Force Majeure
When a force majeure event occurs, it can have a significant impact on businesses and individuals. The most obvious impact is the interruption of normal business operations. This can lead to lost revenue, increased costs, and disruptions to supply chains. For businesses that are heavily reliant on just-in-time delivery, a force majeure event can have a devastating effect.
Individuals can also be impacted by force majeure events. If you are planning a vacation or other trip, a force majeure event can disrupt your plans and cause you to incur unexpected expenses. If you are in the middle of a construction project, a force majeure event can delay completion and cause cost overruns.
While the impact of force majeure events can be significant, it is important to remember that they are often beyond our control. By understanding what force majeure is and how it can impact us, we can be better prepared to deal with the consequences.”
When is Force Majeure Applicable?
Force majeure is a legal doctrine that excuses parties from performing contractual obligations when extraordinary events beyond their control make it impossible or impractical to do so. The purpose of this doctrine is to prevent one party from being unfairly penalized for something that is out of their control.
There are two types of events that can trigger a force majeure clause: unforeseeable events and foreseeable but insurmountable events. Unforeseeable events are ones that could not have been reasonably anticipated, such as natural disasters, wars, or terrorist attacks. Foreseeable but insurmountable events are ones that were anticipated but still could not be avoided, such as supplier shortages or strikes.
Force majeure clauses typically list specific events that will excuse performance, as well as the length of time that performance can be delayed. Some clauses also include steps that the parties must take to mitigate the effects of the event. For example, a force majeure clause might require a party to notify the other party within a certain number of days after learning of the event and to take reasonable steps to resume performance.
If a force majeure event occurs, the first thing that parties should do is check the language of their contract to see if it includes a force majeure clause. If it does, they should review the clause carefully to determine whether the event excuse performance and, if so, for how long. If there is no force majeure clause or the event is
How to Draft a Force Majeure Provision
When it comes to drafting a force majeure provision, there are a few key things to keep in mind. First and foremost, the provision should be clear and concise. It should also be tailored to the specific contract and situation at hand.
There are a few different ways to draft a force majeure provision. One approach is to list out specific events that would trigger the clause, such as war, natural disasters, or terrorist attacks. Another approach is to simply state that any event beyond the parties’ control that prevents performance under the contract will trigger the clause.
Whichever approach you take, it’s important to make sure that the provision is airtight. This means ensuring that there are no loopholes that could be exploited by either party. If you have any doubts about whether your provision is strong enough, it’s always best to consult with an attorney before signing on the dotted line.
A force majeure event is an unforeseeable, external event that prevents a party from fulfilling its obligations under a contract. Force majeure events can include things like natural disasters, terrorist attacks, and pandemics. While contracts typically contain provisions for how to deal with force majeure events, it’s important to consult with an attorney if you’re unsure about how to proceed.