Force Majeure Is Not a Word for Bad Luck

This is less a set of instructions about clauses excusing performance after extraordinary events than an argument, and it is worth saying so at the start.

Where the concept comes from

In common law systems force majeure is not a background doctrine, and a contract without such a clause generally has none. Several civil law systems do recognise a comparable concept in their codes, applying without express drafting. That difference alone means the same event can produce opposite outcomes under contracts governed by different laws.

Anyone reading about force majeure in general terms should therefore check what their own governing law provides. The clause itself is the first place to look, because in many contracts it is the only source of relief.

Reading the list

Most clauses list events, commonly covering natural disasters, war, government action and industrial disputes. General wording at the end of a list may be interpreted narrowly, as covering things similar to the listed items.

Whether a particular event fits is a question of construction, and the answer turns on the exact words used. Clauses drafted after a disruptive period tend to name the events of that period explicitly, which is telling. The absence of an event from the list is not decisive, but it makes the argument considerably harder.

Impossible, not merely difficult

Most clauses require that performance has been prevented, and prevented usually means more than made unprofitable. Some clauses use softer language such as hindered or delayed, which materially widens their reach.

A supplier facing a tripled input price is generally in commercial difficulty rather than in a force majeure event. Where an alternative route to performance exists, even an expensive one, relief is often refused. The distinction between impossibility and hardship is one of the sharpest lines in commercial contracting.

Causation and mitigation

The event has to be the actual cause of the failure, which is harder to show where problems were already building. Clauses usually require the affected party to take reasonable steps to overcome or work around the obstacle.

Where a dispute goes formal, a party that made no attempt to find another supplier may struggle to rely on the clause at all. Records of what was tried and when are the evidence that supports a claim months later.

Sitting quietly and invoking the clause afterwards is the common and avoidable mistake.

Notice and its consequences

Force majeure clauses typically require prompt written notice, sometimes within a short defined period. Missing that requirement can cost the relief entirely, regardless of how genuine the underlying event was. The notice usually has to describe the event, its effect on performance and the expected duration.

Contracts often add a right for either side to terminate if the disruption continues beyond a stated period. That termination right can be the most commercially significant part of the clause and is easy to overlook.

What relief actually looks like

Relief is usually suspension of the affected obligations rather than cancellation of the contract. Payment obligations for work already done are often carved out, since money can generally still be transferred.

Where a dispute goes formal, the clause may leave the parties bearing their own costs, which can be an uncomfortable result for both. Related doctrines such as frustration or impossibility may apply where no clause exists, and their scope is narrow. Any live dispute about performance after a major disruption is a matter for a lawyer looking at the actual wording.

The takeaway

Read the clause before the crisis, because its notice deadlines start running immediately. General information, not legal advice.

Understanding a process is not the same as being represented in it.