Top 5 Tips - Force Majeure Clauses

A “Force majeure” clause is a provision in a contract that relieves the parties from complying with their contractual obligations in certain situations that are beyond their control.

1. The clause doesn’t have to be labelled “force majeure” it is the actual wording that is relevant. You should look for the clause that anticipates an act or event that is beyond the control of the parties that would affect the performance of the contract.
2. It is good practice for all of the force majeure events to be set out. This clarifies the parties’ intentions and avoids confusion at a later date. You should make sure that you include all potential events that could cause your business a problem. Covid19 and the subsequent variants need special consideration.
3. The party relying on the force majeure event will have the responsibility of proving that they are experiencing difficulties in performing their part of the contract as a result of the force majeure event and, usually, that they have attempted to mitigate against the impact of the situation.
4. The force majeure clause should clearly set out the notice requirements and the consequences of non-performance because of force majeure.
5. The more foreseeable an event is, it is more likely that it might have been preventable or avoidable and as such it could be considered to be within a party's control.