Contract Clause Guide

Force Majeure: When Extraordinary Events Prevent Performance

A force majeure clause excuses parties from performing their obligations when extraordinary events beyond their control occur, such as natural disasters, wars, or pandemics. These clauses became critical during COVID-19.

Example Clause

Neither party shall be liable for any failure or delay in performing its obligations where such failure or delay results from Force Majeure Events including but not limited to: acts of God, natural disasters, war, terrorism, riots, pandemics, government actions, or other events beyond the reasonable control of the affected party.

What This Means

If something extraordinary happens that's out of your control (like a pandemic or natural disaster), you won't be held responsible for not fulfilling your obligations. This protects both sides from liability when the impossible happens.

Common Risks to Watch For

1

Narrow list of covered events that may not include pandemics

2

No obligation to mitigate or find alternatives

3

Unclear duration - how long can force majeure last?

4

One-sided clause that only protects one party

5

No right to terminate if force majeure continues too long

Frequently Asked Questions

Does force majeure cover pandemics?

Not automatically. Many older contracts don't list pandemics specifically. Whether COVID-19 counts depends on your contract's language—some courts have rejected pandemic claims where the clause didn't explicitly include health emergencies.

Can you terminate a contract due to force majeure?

Force majeure typically suspends obligations temporarily, not permanently. However, many clauses allow termination if the force majeure event continues beyond a specified period (often 30-90 days).

Is economic hardship force majeure?

Usually no. Force majeure covers events beyond control that prevent performance—not events that make performance more expensive or difficult. Financial difficulties, market changes, and economic downturns typically don't qualify.

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