Key Words

What is the meaning of:

Force Majeure?

Many business-related contracts, including employment agreements and independent contractor agreements, contain a section entitled “Force Majeure.” It is a concept that you should be aware of, understand, and, depending on the circumstances, either beware of or take advantage of.

“Force majeure” is a French phrase that translates literally to “superior force.” In general terms, it means that a party to an agreement who cannot provide what it promised to provide as a result of “uncontrollable events” may be free of responsibility for failure to do so.

In the paragraph above, “cannot provide what it promised” is not meant to be the same thing as “became impossible,” but somewhat broader. It may even include “has become far beyond reasonable to expect.”

Examples of “force majeure events” include, war, labor stoppages, extreme weather, natural disasters, terrorist attacks and epidemics.

Parties to contracts sometimes even take the position that “force majeure events” are so broad as to include spikes in interest rates, stock market swoons, and minor changes in law, but those events are not generally accepted in courts, unless unique circumstances would warrant it.

While “force majeure events” rarely happen, in this era of climate change, political instability, and overall increased uncertainty, one just might happen to you.

Here is an example of a Force Majeure provision in a contract:

“If a Force Majeure Event as defined above, makes a party to this contract unable to comply with one of its obligations, that inability will not constitute a breach of contract if (a) that party’s reasonable efforts would not help, and (b) a reasonable party would not have been likely to have maintained contingency provisions to prevent the inability in question.”

Most people, including lawyers, don’t pay much attention to “force majeure” provisions in contracts. Wiser people seek to broaden the definition or examples of a force majeure event, or limit, as would benefit that person.

For example, if you are promoting a concert, you should try to insert into the “force majeure” definition the unavailability of the concert hall due to fire or water leak. On the other hand, if you have been contracted to sing at a concert, you would be wise to try to insert into the “force majeure” definition “a sore throat” and, perhaps, also, “a force majeure will not include the unavailability of the concert hall for any reason.”

Get the picture? You read about it here. Knowledge is power. Forewarned is forearmed. That’s what SkloverWorkingWisdom™ is all about.

© 2016 Alan L. Sklover. All Rights Reserved. Commercial Use Strictly Prohibited

For a complete list of our Model Letters, Memos, Checklists and Form Agreements, just [click here.]