What is Force Majeure?

Force majeure is a clause that may be included in a legal contract that removes liability and frees parties from obligation in the event of an extraordinary event. Often referred to as “acts of god,” force majeure events are considered unforeseeable occurrences beyond the control of both of the parties. Force majeure clauses typically cover natural disasters such as tornadoes, hurricanes, and earthquakes, as well as human actions such as terrorist attacks and man-made illnesses. Nevertheless, the exact interpretation of force majeure events vary depending on the specific jurisdiction. 

Key Takeaways

• Force majeure is a clause that removes liability and frees parties from obligation in the event of an unforeseeable event or catastrophe.
• This term derives from the French term force majeure, which literally translates to "greater force."
• In most cases, force majeure clauses cover natural disasters and “acts of god.”

Understanding Force Majeure

The concept of force majeure, which originated in French civil law, is an important element in United States contract law. In such cases, circumstances beyond the parties' control release them from their contractual obligations. Without such clauses in place, parties may be forced to uphold their agreements, even in the event of a catastrophe such as a hurricane or tornado.

For example, imagine that a hurricane destroys a clothing supplier’s factory on the coast of Florida. The hurricane caused damage to the factory and led to significant shipment delays. As a result, one of the clothing company’s clients sued the supplier for failing to provide their shipment on time. Fortunately for the supplier, their contract with the client included a force majeure clause in regards to hurricanes. Therefore, the court may rule that the supplier does not have to compensate his clients for the delays.

Components of a Force Majeure Clause

According to the American Bar Association (ABA), a force majeure clause must include the four following elements:

• It must explicitly define the breach for which a party seeks to be excused. This may include natural disasters such as earthquakes, hurricanes, tornadoes, or events caused by humans like terrorist attacks, war and labor strikes.
• It must accurately define the “force majeure event” itself. Since the courts tend to narrowly interpret force majeure claims, it is advised to be specific in regards to the force majeure event itself.
• It must state and define the causal connection between the two components above. In other words, the contract must explain why the occurrence of the force majeure event would lead to the parties’ inability to uphold their obligations.
• It must explain exactly what will happen if performance is indeed excused. Force majeure events may free the parties either temporarily or permanently from their contractual responsibilities.

Bottom Line

In recent years, force majeure clauses have become prevalent in contract law, especially since the start of the COVID 19 pandemic. Learn more about how to properly implement a force majeure clause and use force majeure to your advantage by speaking to an experienced attorney today.