Force majeure
A clause that excuses or delays a party’s performance when events beyond its control, such as natural disasters, war, or pandemics, prevent it.
What it means
Force majeure, French for “superior force,” covers events no one could reasonably prevent, such as floods, fires, war, government orders, and often epidemics. When such an event stops a party from performing, the clause suspends or excuses its obligations while the event lasts, without that party being in breach.
A small events company books a venue for a conference, and a hurricane closes the city. A well-drafted clause would let both sides postpone or cancel without paying damages. It usually requires prompt notice, reasonable efforts to limit the impact, and a right for either side to terminate if the event drags on past a set period, such as 30 or 60 days.
In the US, force majeure is mainly a matter of contract wording, and courts tend to read these clauses narrowly. If an event is not listed and does not fit a catch-all phrase, a party may not be excused. Payment obligations are often excluded, so a business may still owe money even when it cannot use what it paid for. Doctrines such as impossibility exist, but are harder to rely on than a clear clause.
What to watch for
- Check whether the list of events covers the risks that matter to your business, such as pandemics, government orders, cyberattacks, or supplier failures.
- See whether payment obligations are excluded, which means you may still have to pay even if you get nothing in return.
- Look for a notice deadline and follow it, because missing it can cost you the protection.
- Confirm that either party can terminate if the event lasts beyond a stated period, and what happens to prepaid amounts.
- Check whether the clause is mutual or protects only the other side.
Example clause
Neither party will be liable for any delay or failure to perform, other than payment obligations, caused by events beyond its reasonable control, including natural disasters, epidemics, war, terrorism, or government action. The affected party must notify the other within 5 business days and use reasonable efforts to resume performance, and either party may terminate if the delay exceeds 60 days.
A qualifying disaster pauses performance without liability, but you still owe any money due.