How to Analyze Force Majeure Clauses

A guide to reviewing contractual clauses that excuse performance. Learn to identify key risks and negotiation points in commercial agreements, whether you're reviewing one contract or hundreds.

Reviewing contracts for risk involves checking force majeure clauses. These clauses excuse a party's performance when an unforeseeable event makes it impossible. Without a well-drafted clause, disputes arise. Jarel helps legal teams analyze these provisions across entire contract portfolios, linking every finding directly to its source in the document.

What Defines a Force Majeure Event? A force majeure clause specifies events beyond a party's reasonable control, like natural disasters or government action. The exact definition is critical. Parties must negotiate this list; what one party considers an unforeseeable event, another might see as a manageable business risk. Vague drafting leads to disputes.

Practical Application in Contracts. A force majeure clause modifies contractual obligations. It typically excuses or suspends a party's performance. The non-performing party must demonstrate the event directly caused the non-performance. Notice requirements and mitigation efforts are often stipulated in the clause. Parties must draft these clauses carefully.

FAQ

Common questions

What constitutes a force majeure event?

The contract clause itself defines a force majeure event. Reviewers should look for a specific list of events (e.g., 'epidemic,' 'war') and any catch-all language (e.g., 'acts of God'). Check for the required causal link, notice periods, and mitigation duties, as these are common points of dispute.

Is force majeure automatically implied in contracts?

No. Force majeure is almost always a creature of contract. It is rarely implied under common law. Its application depends on specific contractual language. Civil law jurisdictions may have statutory provisions for similar situations.

How does force majeure differ from frustration of contract?

Force majeure operates based on a specific contractual clause. Frustration of contract applies when an unforeseen event makes performance impossible or fundamentally changes the contract's purpose, even without a specific clause. Frustration may terminate the contract entirely. Force majeure often allows for suspension or delayed performance.

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Force Majeure: Definition, Application, and Impact

How to Analyze Force Majeure Clauses

Common questions

What constitutes a force majeure event?

Is force majeure automatically implied in contracts?

How does force majeure differ from frustration of contract?

Meet your first agent

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