TL;DR
Force majeure is a contract clause that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents one or both parties from fulfilling their contractual obligations. It provides legal protection in cases of unforeseeable events like natural disasters, wars, or pandemics.
Concept
Force majeure is a contract clause that relieves both parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents one or both parties from fulfilling their contractual duties. This legal concept provides protection in cases of unforeseeable events that make performance of the contract impossible or impracticable.
The term “force majeure” is French for “superior force.” It refers to events or circumstances that are unforeseeable, unavoidable, and beyond the reasonable control of the parties involved. Some common examples of force majeure events include:
- Natural disasters (earthquakes, floods, hurricanes, etc.)
- Wars, riots, or civil unrest
- Pandemics or epidemics
- Strikes or labor disputes
- Government actions or regulations
- Cyber attacks or technology failures
When a force majeure event occurs, the affected party may be excused from performing their contractual obligations, either temporarily or permanently, depending on the duration and impact of the event. The force majeure clause typically outlines the specific events that qualify, the notice requirements, and the consequences of invoking the clause.
To successfully invoke force majeure, the affected party must demonstrate that:
- The event was unforeseeable and beyond their reasonable control.
- The event made performance of the contract impossible or impracticable.
- The affected party took reasonable steps to mitigate the impact of the event.
If the force majeure event is temporary, the affected party may be required to resume performance once the event has passed. If the event is permanent or causes a significant delay, the parties may have the option to terminate the contract without liability.
Force majeure clauses are important in contracting because they provide a legal framework for dealing with unexpected and uncontrollable events that could significantly impact a party’s ability to fulfill their contractual obligations. By including a well-drafted force majeure clause, parties can minimize their risk and protect their interests in the event of extraordinary circumstances.
