Force majeure is a French term that is often used in contracts. The term means "greater force" and refers to major acts that excuse the fulfillment of obligations when circumstances arise that are beyond the control of the parties. Such clauses are included in a wide range of contracts, including those for services and goods.
A contract is a binding agreement. When one party does not fulfill its obligations, the other party can usually take action. Force majeure is a clause that prevents parties from taking action when obligations are not fulfilled due to acts which could not possibly be controlled. These include natural acts, such as tsunamis, earthquakes, and floods. It also includes man generated obstacles, such as war, states of emergency, and bans.
Acts that are listed in force majeure clauses are not always sufficient excuses for a party's failure to meet his obligations. Even when such acts have occurred or are occurring, it may be possible for the party to adhere to the contract. If he doesn't, he may be liable for the breach.
For example, consider an agreement where a company is supposed to ship goods to a foreign country but discovers a war has broken out and decides not to do so. If the war is occurring in an area that is relative to the shipment, the force majeure clause may offer protection for not fulfilling the agreement. If, however, the war is in a distant location that has no relation or impact on the shipment, failure to deliver is not likely to be protected by the force majeure clause.
Many people believe that force majeure automatically denotes certain acts, and there are some acts that are commonly included in such clauses. The term does not have an absolute and internationally accepted definition, however. Some clauses may contain acts that are not included in others. For example, some contracts consider the breach by a third party to be a force majeure, while for others this is not acceptable.
For this reason, it is best that the terms be outlined as thoroughly as possible. It is also important to make sure that the clause offers protection that covers both parties. Even if one party has a role in the contract that seems to include the majority of the responsibilities and risks, such as that of a supplier, the other party should still seek coverage by the clause.
