Force Majeure
Contract Type:
Generic Contract
Jurisdiction:
Neither party shall be liable for any failure or delay in performing its obligations under this Agreement to the extent that such failure or delay is caused by a Force Majeure Event. A Force Majeure Event means any event beyond a party's reasonable control, which by its nature could not have been foreseen, or, if it could have been foreseen, was unavoidable, including strikes, lock-outs or other industrial disputes (whether involving its own workforce or a third party's), failure of energy sources or transport network, acts of God, war, terrorism, riot, civil commotion, interference by civil or military authorities, national or international calamity, armed conflict, malicious damage, breakdown of plant or machinery, nuclear, chemical or biological contamination, sonic boom, explosions, collapse of building structures, fires, floods, storms, earthquakes, loss at sea, epidemics or similar events, natural disasters or extreme adverse weather conditions. Provided it has complied with clause [notification clause], the party affected by the Force Majeure Event shall not be in breach of this Agreement and its obligations under this Agreement shall be suspended for so long as the Force Majeure Event continues and for such time after it ceases as is necessary for that party, using all reasonable endeavours, to recommence its affected operations in order for it to perform its obligations. The corresponding obligations of the other party will be suspended to the same extent.
Explanation
Here is a plain English explanation of the suggested Force Majeure clause:
This clause excuses both parties from liability if they fail or delay in performing their contractual obligations due to a Force Majeure Event. A Force Majeure Event means any unexpected event outside a party's reasonable control that they could not have reasonably prepared for or avoided.
The clause provides a non-exhaustive list of examples of Force Majeure Events, including things like natural disasters, wars, accidents, and supply chain disruptions. If a Force Majeure Event occurs, the affected party is not considered in breach of contract if they fail to perform their obligations under the agreement while the event is happening and for a reasonable period of time afterwards. The other party's obligations are put on hold for the same period.
The main purpose of this clause is to excuse both parties from contract liability if events truly outside their control make it impossible or extremely difficult for them to uphold their end of the agreement.
However, the impacted party must properly notify the other party as required elsewhere in the contract.
The concept of force majeure has its roots in French civil law, which recognized that unexpected external events could sometimes make contract performance impossible or impracticable through no fault of the parties.
This general principle was adopted into English common law over centuries of legal development. Early English court cases outlined the idea that parties should be released from liability where unforeseeable events prevented contract fulfillment.
Over time, legal scholars and practitioners developed more standardized force majeure clauses to codify this relief into contracts. By the 19th century, force majeure provisions became common in English commercial contracts, especially those involving international sale of goods. Drafters recognized such clauses were necessary in an increasingly globalized economy where long-distance trade could be disrupted by wars, natural disasters, and other catastrophic events abroad.
The modern form of detailed force majeure clauses emerged as business transactions became more complex in the 20th century. Legal experts promoted comprehensive "laundry lists" of potential force majeure events to provide maximal clarity for international business contracts. English courts have overall endorsed the validity of these standardized force majeure clauses, following the early common law recognition that contracted parties should be excused from liability in extraordinary, unpreventable circumstances.
Their inclusion is now considered a best practice in English law across many different fields and agreements.
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