This is a term that you may have heard before, but may not know what it means. Force majeure is a legal term that refers to an event or occurrence that is beyond the control of either party involved in a contract. This can be used as a defense in the event that one party fails to uphold their end of the bargain, due to an unforeseen event. In this blog post, we will discuss what force majeure is and how it can be used in legal contracts.
There are several factors that can constitute as force majeure. Some examples include natural disasters, war, terrorism, and civil unrest. As long as the event is beyond our control and we could not have reasonably foreseen it, then it may be used to defend a party from breaching their contract. In addition, in order for this defense to work properly there must be specific language that includes force majeure within the document itself.
If there isn’t then it may not be valid and won’t hold up in court.
Force Majeure as an Act of God
In normal circumstances, force Majeure and an Act of God can be used interchangeably. However, in some cases there may be a distinction. An Act of God is typically seen as something that is natural and out of our control, such as a hurricane or tornado. On the other hand, force majeure can also include man-made disasters, like a terrorist attack.
Since an Act of God is considered to be a natural disaster, it may not require specific language in order to use the defense. Force majeure, however, is more complicated and requires that specific wording be included within your contract if you wish for it to serve as legal protection against liability from breaching said document.
Some factors that could constitute force majeure:
- Natural disasters
- War
- Terrorism
- Civil unrest
The event must be beyond our control and we couldn’t have reasonably foreseen it in order for it to constitute as force majeure. In addition, specific language needs to be included within the document itself in order for it to be valid.
Breach of Contract without penalty
It is important to note that force majeure does not allow for one party to breach their contract without penalty, but rather allows them time to remedy the situation or make an excuse for why they could not perform as expected. This may be done through negotiation with the other party involved and should not result in litigation unless absolutely necessary. The effect of such an occurrence depends largely on how well both parties work together to reach a satisfactory resolution for all parties involved.
If there is an unforeseen event that would normally constitute as force majeure, but has been excluded from the contract then it cannot be used as a defense. However, if such an event does occur and both parties agree to waive their rights under the clause then this may work out better for everyone involved than going through litigation which can take years and be costly.
Generally, when it comes to contracts and force majeure, clear communication is key. If you have any questions or concerns about how this may affect your specific contract, please consult with an attorney who can help guide you through the process.
Legal effects of Force Majeure
In most contracts, force majeure is a clause that allows one party to be excused from fulfilling their obligations if there are unforeseen circumstances beyond their control. If this happens then the other party will not have any legal recourse against them for failing to perform as expected under normal conditions. The effect of such an occurrence depends largely on how well both parties work together to reach a satisfactory resolution for all parties involved.
If there is an unforeseen event that would normally constitute as force majeure, but has been excluded from the contract then it cannot be used as a defense. However, if such an event does occur and both parties agree to waive their rights under the clause then this may work out better for everyone involved than going through litigation which can take years and be costly.
Generally, when it comes to contracts and force majeure, clear communication is key.
Force Majeure and Frustration of Contracts
There are a few ways that force majeure can be used in the context of frustration of contracts. In order for this to apply, there must first be an existing contract between two or more parties. Secondly, an unforeseen event must take place that renders the contract impossible to perform. Finally, the party who is seeking to rely on this defense must have been unable to perform their obligations under what would have been normal circumstances.
The purpose of frustration is not so much that it renders the contract void, but rather creates a situation where both parties can no longer fulfill their respective duties anymore – either because they are physically or financially unable to do so any longer (or even if one party wants out but feels no way around it).
The Importance of Force Majeure Clauses in the COVID-19 Era
As the COVID-19 pandemic continues to evolve, it is important for businesses of all sizes to start thinking about how this may impact their contractual obligations. This is especially true in light of the fact that force majeure clauses can be used as a defense in the event that one party is unable to meet their contractual obligations due to an unforeseen event beyond their control.
For example, if your company has a contract with another business and COVID-19 causes either one or both parties to be unable fulfill their side of the agreement then you may want consider adding force majeure language into any new agreements moving forward so that there is an understanding ahead of time what happens when circumstances are beyond our control.
In addition to this, there is a good chance that the courts will be flooded with lawsuits related COVID-19 over time. For small business owners who might not have enough money or resources available to take on such litigation costs themselves – it’s worth having legal counsel review existing contracts now before things get any worse out there so they are prepared for whatever comes their way.
The COVID-19 pandemic has affected almost every country in the world. While it is uncertain what will happen next, we know from history that force majeure clauses can be useful tools to have on hand when you are faced with unforeseen circumstances beyond your control. In light of this, it may be worth taking a look at any existing contracts you may have and adding force majeure language into them if necessary.
Is a Force Majeure Clause necessary in every contract?
Force majeure clauses are not always necessary in contracts, but it is important to know when they should be used. In most cases, these clauses will only apply if something happens that prevents one party from fulfilling their obligations under normal circumstances and there was no way for them to prevent or stop this event beforehand (i.e., an act of God).
For example, if your business operates out of an office building and there is a fire on the premises that causes significant damage so much so that it renders parts or all unusable then this might qualify as force majeure event based upon how each contract is written. However, in order for such language to apply it must be shown that the event was truly unforeseen and not something that either party could have reasonably foreseen.
Can a force majeure clause be inferred?
There is no one-size-fits-all answer to this question, as it will depend on the specific language of each contract. However, in some cases a force majeure clause can be inferred from the circumstances even if it is not explicitly mentioned in the document. This happens when both parties have an understanding that something outside of their control could happen which would make it impossible for them to fulfill their obligations under normal circumstances and there was no way around this issue.
For example, if you are contracting with another company and the contract states that they must deliver goods by a certain date but there is an unforeseen event such as COVID-19 pandemic then your business may be able to argue that the contract is unenforceable due to force majeure. Again, this will depend on how each agreement is written.
In light of the COVID-19 pandemic, it is important to know what your rights are when it comes to contracts that have been affected by unforeseen circumstances. This will help protect yourself and other businesses during these uncertain times.
Conclusion
While it is unclear what the future holds, one thing that we know for sure is that force majeure clauses can be useful tools to have in your arsenal when faced with unforeseen events. If you are unsure whether or not your contract includes such a clause, it may be worth reaching out to legal counsel to help you navigate these waters.
In summary, force majeure clauses may be invoked in order to free one party from liability for not fulfilling their obligations due to an unforeseen event. The clause must be included within the contract and it should clearly state what type of events would qualify as a force majeure situation (examples include natural disasters like hurricanes or earthquakes).