A force majeure clause is a provision in a contract that excuses a party from fulfilling their obligations under the contract when certain circumstances beyond their control arise. These circumstances are often referred to as "acts of God," and can include events such as natural disasters, war, and epidemics.
The purpose of a force majeure clause is to protect both parties in a contract from being held liable if they are unable to fulfill their obligations due to unforeseen events. This can provide some much-needed relief to businesses that are impacted by such events, allowing them to focus on dealing with the situation at hand instead of worrying about potential legal repercussions.
For example, let's say that a manufacturer has entered into a contract to supply a retailer with a certain number of products by a specific date. However, due to a natural disaster, the manufacturer is unable to meet their obligations under the contract. In this case, the force majeure clause in the contract would excuse the manufacturer from any liability for failing to fulfill their obligations, allowing both parties to move forward without the fear of legal action.
One famous example of a force majeure clause being invoked occurred in the wake of the 9/11 terrorist attacks in 2001. In the aftermath of the attacks, many businesses were unable to fulfill their contracts due to the destruction of the World Trade Center and the disruption to transportation and other infrastructure. In these cases, the force majeure clause allowed the affected parties to be excused from their obligations without fear of legal repercussions.
Overall, force majeure clauses are an important tool in contracts that can provide much-needed relief to businesses in the face of unforeseen events. These clauses help to protect both parties from potential liability and allow them to focus on dealing with the situation at hand.
This is not legal advice, if you have a question regarding contracts, please contact our office at (202) 499-2403 or 1 (833) CALLJKW to schedule a consultation.