Contract Tip - The Force Majeure Clause
Force Majeure (French for “superior force”) is a provision in a contract that excuses one or both parties’ performance of their contractual obligations when that performance becomes impossible or impracticable due to an extraordinary event that arises beyond the control of the parties.
Force majeure events typically enumerated in contracts include wars, riots, strikes, severe weather events (such as a hurricane), severe acts of nature (such as a volcano eruption), and acts of governmental authorities (such as expropriation). After the terrorist attacks of September 11, 2001, many people started adding "terrorism" to their list of force majeure events. In today's COVID-19 era, people are one again re-evaluating their contracts and adding "virus pandemics" to their list of enumerated events.
Generally, force majeure clauses are interpreted narrowly. The parties must spell out what constitutes force majeure in the contract itself. If the contract does not include a force majeure provision (or if the relevant event does not fall within the scope of the force majeure clause), a party may have to rely on common law doctrines such as “impossibility of performance” or “frustration of purpose” in order to be discharged of contractual obligations.