Force Majeure
Force Majeure is a legal concept used throughout the world. It is a French term Meaning “superior force”, and it is a commonly accepted term used to describe unforeseeable, unavoidable and extraordinary events beyond the control of the parties that are involved in a contract. In legal terms, force majeure is a clause that can be included in a contract. The clause absolves the contracting parties of liability for this failure to perform their contractual obligations under extraordinary and unavoidable circumstances.
Force Majeure events are events that are completely outside of the control of the parties to a contract and are often unforeseen or unpredictable at the time of entering into the contract. The most common types of Force Majeure events can include acts of God, such as weather events, earthquakes, floods, or other natural disasters. It can also include human-caused events, such as war, terrorist attacks, and other acts of civil disobedience.
There are many benefits to including a Force Majeure clause in a contract, as it can provide some level of protection for both the parties. The clause allows the affected parties to be released from contractual obligations due to events outside of their control. As a result, the parties may be able to walk away from a contract without being held liable for any breach of the contract’s terms.
In addition, when a Force Majeure clause is included in a contract, the parties may also be able to negotiate modifications to the contract that take into consideration the events that have occurred. This may include changes to the terms of delivery and payment, or other changes in the scope of the agreement that are necessary to take into consideration the Force Majeure events.
When it comes to disputes over the interpretation of a Force Majeure clause, courts vary in how they interpret these clauses and will often look to the specific language of the clause to determine who should bear the burden of the losses. Some courts may even allow the parties to use other theories of law, such as common law doctrines of frustration of purpose, or estoppel, to argue that the force majeure event has made it impossible for either party to perform their obligations.
Overall, Force Majeure clauses can be incredibly beneficial for both contracting parties. These clauses allow parties to protect themselves from potentially costly litigation, reduce their risk of incurring significant losses, and provide a legal basis for negotiations and modifications in response to Force Majeure events.
