What is force majeure?

Force majeure meaning ‘superior force’, also known as ‘chance occurrence, unavoidable accident’, is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure.

It is generally intended to include occurrences beyond the reasonable control of a party, and therefore would not cover:

  • Any result of the negligence or malfeasance of a party, which has a materially adverse effect on the ability of such party to perform its obligations.
  • Any result of the usual and natural consequences of external forces.
    • To illuminate this distinction, take the example of an outdoor public event abruptly called off.
      • If the cause for cancellation is ordinary predictable rain, this is most probably not force majeure.
      • If the cause is a flash flood that damages the venue or makes the event hazardous to attend, then this almost certainly is force majeure, other than where the venue was on a known flood plain or the area of the venue was known to be subject to torrential rain.
      • Some causes might be arguable borderline cases (for instance, if unusually heavy rain occurred, rendering the event significantly more difficult, but not impossible, to safely hold or attend); these must be assessed in light of the circumstances.
  • Any circumstances that are specifically contemplated (included) in the contract – for example, if the contract for the outdoor event specifically permits or requires cancellation in the event of rain.

As a more recent example, the Covid-19 worldwide pandemic can justify many delays and cancellations that could have not been foreseen, therefore parties not being able to fulfill their contractual obligations due to this, may be justified.

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