What is a Force Majeure Clause?

A force majeure provision is a clause in a contract that addresses the responsibilities of the parties to the contract in the event that performance of their respective duties becomes impossible or impracticable. Essentially, if such an extraordinary and unforeseen event occurs, the parties will be excused from certain duties or obligations under the contract. A force majeure clause can be invoked under certain extreme situations, which are usually detailed in the contract. It is also important that the situation is not within the control of the party that is unable to perform its duties or obligations and that the situation is not the result of any fault or negligence by the non-performing party.

Common force majeure events include:

• Fire
• Flood
• Epidemics
• Earthquake
• Tsunami
• Quarantines
• Acts of war
• Revolutions
• Threatened or actual acts of terrorism
• Strikes
• Explosions
• Action of the government or public authority

Application of force majeure clauses.

There are different ways to resolve the nonperformance of a party’s duties under the contract depending on the specific situation at hand and the language of the force majeure clause. One option is that performance may be delayed.  If performance is delayed, the parties may agree to wait until the force majeure event has passed to resume performance.  Another option is that performance may be terminated all together.  If the event is very severe, performance may simply be rendered impossible, and the parties may be released from their obligations altogether if the force majeure provision contemplates such an event.  A force majeure provision could also incorporate a combination of delay and termination.  For example, a clause could allow for a delay in performance if there is a force majeure event but then allow for a termination option if the delay in performance continues for a specified period of time.

Drafting a force majeure clause

While it may be impossible to include every potential event in a force majeure clause, it is important to be specific in drafting the clause. Depending on the jurisdiction, courts can be very strict on interpreting a force majeure clause, meaning a court will only uphold a force majeure clause if the event was specifically included in the provision.

If you have any questions or want assistance with information relating to force majeure clauses, please reach out to one of our attorneys at McNeelyLaw LLP by calling (317) 825-5110.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.