What Is Force Majeure?

When you write a business contract, you should always do your best to plan for all possibilities, obstacles and contingencies in the contract. But even the best laid plans go awry, and life often throws things at us that we not only can’t anticipate, but which we can’t control. That’s where the standard contractual Force Majeure clause comes in.

What is Force Majeure?

A Force Majeure clause is a clause in a contract that will excuse performance under the contract for something that neither party can anticipate or control. They are sometimes called “Acts of God” clauses, but really Force Majeure also covers man made or created problems that nobody could foresee.

The act that happens must not only be unforeseeable, and not be able to be anticipated, but it must make performance of the contract impossible or impractical.

Examples of Force Majeure

When the COVID 19 shutdowns hit, many Force Majeure provisions in contracts were used to excuse performance. A pandemic is a good example of something that a Force Majeure clause would be used for; it is not anticipated, it is uncontrollable by the parties, and certainly would restrict the ability to carry out most contracts.

But pandemics aren’t all that Force Majeure provisions will cover. Other acts may be:

-War or civil unrest

-Terrorism

-A government shutdown of businesses for any reason

-Structural collapses

-Labor strikes or lockouts

-Transportation problems (for example, something that would shut down airline flight or Port Everglades)

Why Force Majeure?

Force Majeure recognizes that parties can’t contract for every possibility, and there are possibilities that are so remote, so unlikely, that it would not be reasonable to ask parties to account for them in their contracts.

The Force Majeure event must directly cause the inability to perform the contract. So, if a contract could be performed even in the face of the event, the fact the event happened, won’t be enough to excuse performance.

Foreseeability

One thing courts will look at to see if Force Majeure excuses performance under a contract is whether the “act of god” or unexpected act, is and was truly unforeseeable.

For example, in Florida, we get hurricanes, or at least, closures due to threatened hurricanes. That isn’t unusual or unexpected. So, while a hurricane or a hurricane warning may shut businesses down, and while they aren’t an everyday occurrence, it is reasonable for parties to expect that they could happen, and thus, to plan for them in their contracts.

Contrast that with things like earthquakes or sinkholes, both of which do happen here in Florida, but which are far less likely or common. Those events may more likely fall under the category of Force Majeure.

Can’t Cover Everything

Force Majeure clauses cannot be overly broad. If they are too broad, the parties aren’t actually bound by the contract, and the contract may be considered what is known as illusory.

Call our Fort Lauderdale business law lawyers at Sweeney Law P.A. at 954-440-3993 today for help if you have a lawsuit related to a business contract or a contractual dispute.

Sources:

flabizlaw.org/files/Florida%20Bar%20Force%20Majeure%20Materials.pdf

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0200-0299/0288/Sections/0288.955.html