What is a Force Majeure clause?

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The term “force majeure” comes from French and means “superior force.”  As a legal term, it refers to an unpredictable and extraordinary event that prevents the competition of a contract.  Due to the extreme and unpredictable nature of force majeure events, a force majeure clause is often used in business agreements to relieve both parties of liability for non-performance of the contract during a force majeure event.  In many cases, performance of the contract must be resumed after the force majeure event has ended.

Force majeure events are generally considered to include large devastating events beyond either party’s control.  Some examples that are commonly listed in force majeure clauses are Acts of God (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (regardless of whether war is declared), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalization, government sanction, blockage, embargo, labor dispute, strike, lockout or interruption or failure of electricity or telephone service.

While force majeure clauses rarely need to be taken advantage of by either party, they provide a basic level of fairness between the parties to a contract by ensuring that neither party will be held responsible for non-performance due to extraordinary events.

If you have any questions about a potential breach of contract, please contact our office for a legal consultation.