Force majeure—French for 'superior force'—is a contract clause that frees both parties from obligations when extraordinary events beyond their control prevent them from fulfilling the contract. These events, sometimes called 'acts of God,' include natural disasters, wars, pandemics, government actions, and other unforeseeable circumstances that make performance impossible or impractical.
Force majeure clauses typically list specific events that qualify, such as earthquakes, hurricanes, floods, fires, epidemics, wars, terrorist attacks, government regulations, embargoes, and strikes. The COVID-19 pandemic brought renewed attention to these clauses, as businesses worldwide sought to invoke force majeure to excuse non-performance during lockdowns and supply chain disruptions.
For a force majeure clause to be invoked, several conditions must typically be met: the event must be beyond the reasonable control of the affected party, the event must actually prevent or significantly hinder performance, and the affected party must not have been able to reasonably foresee or prevent the event. Financial hardship alone usually does not qualify—the event must make performance truly impossible or impractical, not merely more expensive.
The effects of invoking force majeure vary by contract. Some clauses suspend performance obligations for the duration of the force majeure event, while others allow termination if the event persists beyond a specified period. The clause should also address notice requirements—typically, the affected party must notify the other party promptly and provide evidence of the force majeure event.
Contracts without force majeure clauses may still provide relief through common law doctrines like impossibility of performance, impracticability, and frustration of purpose. However, these doctrines are generally harder to establish than contractual force majeure. This is why including a well-drafted force majeure clause in your contracts is important—it provides greater certainty and clarity for both parties.
When drafting a force majeure clause, be specific about which events qualify and which don't. Include a catch-all phrase like 'and other events beyond reasonable control' to cover unanticipated situations, but be aware that courts may interpret broad language narrowly. Address the consequences of a force majeure event, including notice requirements, the duration of excuse, and the right to terminate.
The duty to mitigate applies even in force majeure situations. The affected party must take reasonable steps to overcome or work around the force majeure event. For example, if a supplier can't deliver due to a natural disaster, they should attempt to source materials from alternative locations. Failure to mitigate may weaken a force majeure claim.
Given the increasing frequency of extreme weather events, pandemics, and geopolitical disruptions, every business contract should include a carefully drafted force majeure clause. Review your existing contracts to ensure they provide adequate protection, and consider whether the force majeure provisions need to be updated to reflect current risks.
