In a dangerous world like today, nothing is guaranteed, and anything can go wrong due to unwanted situations that could turn even the most perfect plans. That is where the force majeure clause comes into play. This is a powerful provision in a contract that grants immunity to the parties in the event that breaching the contract is not possible due to unexpected events such as natural calamities, pandemics, and governmental intervention.
One must understand how a force majeure clause in a contract performs, mainly in case of a dispute or delay. We shall talk about its purpose, effect before the law, and hazards.
Force majeure is a French word that means greater force. It is applied in the legal field, where it explains unexpected happenings and renders an individual incapable of completing a contract. A force majeure clause names the type of incident that amounts to a force majeure, and what happens in case there is such an incident.
Examples of common force majeure include:
These definitions give a certain degree of protection, and parties can be in a position to suspend the performance of obligations or end them without interference with the law or contractual default.
Force majeure clauses are not equal. Their scope and enforceability depend, to a great extent, on how they are worded. Below are the most typical features:
The clause must specifically enumerate or define what events constitute force majeure. The more specific the enumeration, the better it is to use.
Most contracts call for the aggrieved party to notify the other party immediately upon the occurrence of a force majeure event. Notice failure might restrict legal remedy.
A good clause will enumerate the relief available – delay in performance, suspension of obligations, or even cancellation of the contract.
The party requesting force majeure will, in most cases, be required to prove that they conducted themselves reasonably in trying to prevent or reduce the effects of the event.
Some clauses come with a time bar- in case the force majeure lasts longer than a certain amount of time, which has been stated, either of the parties is allowed to dissolve the deal.
It is, therefore, recommended that you sit with a Civil Litigation Solicitor in Perth to make your contracts legal and fair due to the complexity of these combined provisions.
Force majeure does not happen just because the contract has become impossible or uneconomical to perform. The event must:
In litigation, courts will scrutinise the language employed in the force majeure term of the agreement closely. If an event is not explicitly designated or fails the defined parameters, the clause is not applicable.
Triggering a force majeure clause is not necessarily easy. Most often, it is likely the issue of whether an event indeed fits within the definition. For instance, when the COVID-19 pandemic hit businesses across the globe, not all pre-pandemic contracts specifically include “pandemic” or “government shutdowns” as force majeure events.
This is where a Lawyer for Breach of Contract Perth, comes in useful. A professional may:
Non-compliance with the requirements of the clause or misuse of force majeure can expose you to additional legal liability, such as for breach or monetary damages.
Observe that force majeure should not be confused with the legal doctrine of “frustration of contract.” Although both operate with unforeseen events, frustration arises where an event renders performance under the contract impossible, and there is no force majeure clause in the contract.
In such a situation, the law of frustration may be invoked, but it is much more difficult to obtain legally and is of limited value. That is another reason why an effective force majeure clause must be included in any agreement.
Force majeure is an indispensable aspect of modern contract law, which forms a lifesaver when unforeseen events arise to interfere with the course of doing business. However, the force majeure clause has to be well-written and well-deserved to pass through.
In the case of uncertainty about the protection in your agreement or being at risk of a breach of contract vs breach of warranty case due to the event of force majeure, we highly recommend speaking with a qualified professional. A breach of contract lawyer is highly experienced in contract law and will be able to clarify your rights and obligations.