Force majeure is a common provision or clause in contracts that frees involved parties from liabilities or obligations when an extraordinary event or circumstance beyond their control prevent them from fulfilling some or all of their contractual duties. Examples of extraordinary events include natural calamities, sociopolitical instability, and pandemic.
Including this clause in a written contract provides an additional layer of protection for involved parties by proactively taking into consideration possible scenarios that could affect the performance of agreed roles and responsibilities. Take note that the English phrase “superior force” is the literal equivalent of this French phrase.
How to Write a Force Majeure Clause
Writing the details of the clause is considerably a straightforward task. Below are the general elements and considerations that should be contained and described in a force majeure clause:
1. General Definition of Force Majeure
It is standard practice to include a brief description of the concept using textbook or applicable legal definitions to promote and instill an understanding of specific terms and conditions. Remember that mutual agreement or meeting of the minds is one of the elements of an enforceable contract.
2. Description of Extraordinary Events
The clause should also list and describe events or circumstances considered as extraordinary. An event should be both disruptive and uncontrollable for it to be considered extraordinary. These include natural calamities such as storms, volcanic eruptions, and earthquakes; humanmade events such as civil unrest, war, and sociopolitical instability; disease outbreak or pandemic; and other unforeseeable circumstances that could not be mitigated using best efforts.
3. Consequences of the Event or Circumstance
It is also critical to highlight the fact that a force majeure event will prevent either or all of the involved parties from carrying out their contractual obligations. Doing so involves reiterating the special rights or privileges of the parties, as well as their specific duties that would take effect as a consequence of an extraordinary event.
4. Notification and Other Standard Protocols
Some contracts include specific guidelines or protocols that affected parties need to observe at the onset of a force majeure event. These protocols revolve around the need for the specific party to notify the other party about its wish to claim protection following the occurrence of the extraordinary event, and the need to communicate plans to mitigate the impacts of the event.
Note on Writing a Suitable Force Majeure Clause
An important reminder when it comes to writing a force majeure clause is to avoid using generic or preformatted templates. Despite being one of the common components or clauses of a written contract, this clause is often misused.
Some jurisdictions have legal doctrines such as the impracticability doctrine and the frustration of purpose that automatically provide parties with specific rights. A particular force majeure clause should not simply restate what the law already provides.
The writer should tailor the clause according to the nature of the transaction and the overall agreement. For example, it should list and describe the events applicable to the transaction. A generic listing is impossible because the types or kinds of events are almost infinite.
A generic and vague list of extraordinary events could leave rooms for detrimental interpretations. However, writing a too specific force majeure clause could limit the rights and duties of involved parties, thus defeating its protective purpose. A poorly written provision can expose involved parties to a considerable amount of risk.