What is a force majeure clause?

A force majeure clause excuses or delays contractual performance when extraordinary events outside a party's control prevent performance.

What events usually qualify as force majeure?

Typical qualifying events include natural disasters, war, some government actions, and other extraordinary disruptions listed in the contract.

Does force majeure apply automatically?

No. Courts usually apply force majeure only when the contract language clearly covers the event and the event actually prevents performance.

What should a party do when invoking force majeure?

The affected party should provide notice, document the impact, and take reasonable steps to mitigate delays or other contractual disruption.

What Is Force Majeure? Quick Reference

Definition

Force majeure (French for "superior force") is a contract clause that excuses one or both parties from performing their contractual obligations when an extraordinary event beyond their reasonable control prevents performance.

Force majeure clauses are designed to allocate the risk of unforeseeable, catastrophic events -- ones that neither party anticipated and neither could prevent. They acknowledge that sometimes performance is simply impossible, and they specify what happens in those situations.

How Force Majeure Works

A typical force majeure clause does three things:

Defines what events qualify -- usually a list of specific events ("acts of God, war, pandemic, government action...") followed by a general catch-all ("or any other event beyond the reasonable control of the parties")
Specifies the effect -- typically suspending (delaying) the affected party's performance obligations for the duration of the event
Sets conditions -- usually requiring the affected party to give prompt notice and use reasonable efforts to mitigate the impact

Events That Typically Qualify

Force majeure clauses vary by contract, but commonly covered events include:

Natural disasters (earthquakes, floods, hurricanes, tornadoes)
Acts of war, terrorism, or civil unrest
Government actions (shutdowns, mandatory closures, embargoes, sanctions)
Pandemics or public health emergencies declared by government authorities
Strikes or labor disruptions (if not involving the affected party's own employees)
Utility failures (extended power outages, internet outages)
Fire or explosion

Events That Typically Do Not Qualify

Courts interpret force majeure clauses narrowly. Events that generally do not qualify include:

Increased costs or reduced profitability. A tariff that makes performance more expensive does not make it impossible. Most courts will not excuse performance simply because it became less profitable.

Market changes. A drop in demand, a change in market conditions, or an economic downturn does not trigger force majeure.

Events that were foreseeable. If the risk of the event was foreseeable when the contract was signed, courts may find it was implicitly assumed. For example, a contract signed during a period of active tariff negotiations may not be excused by subsequent tariffs.

Internal business problems. Supply chain failures, loss of key personnel, or financial difficulties internal to one party typically do not qualify.

The "Impossible vs. Impractical" Distinction

Most force majeure clauses require that performance be impossible (or at least substantially prevented) -- not merely more difficult, more expensive, or inconvenient.

This is a high bar. Courts have declined to excuse performance in situations where:

Costs increased by 25% due to commodity price changes
A supplier went out of business (if alternative suppliers existed)
Economic conditions made the contract unprofitable

A few courts apply the lower standard of "commercial impracticability" -- meaning performance is so unreasonably burdensome as to be practically impossible -- but this is not universal.

Force Majeure and COVID-19

The COVID-19 pandemic generated significant litigation over force majeure clauses, producing a body of case law on what qualifies. Key takeaways:

Clauses that explicitly listed "pandemic," "epidemic," or "public health emergency" were generally enforced
Clauses with broad "governmental action" language were enforced when mandatory shutdowns physically prevented performance
Clauses that only listed traditional natural disasters were often found insufficient to cover COVID-19
Economic hardship alone (lost revenue, reduced demand) was consistently held not to qualify

Notice Requirements

Most force majeure clauses require the affected party to:

Provide prompt written notice of the force majeure event (often within a specified number of days)
Describe the nature of the event and its expected duration
Use commercially reasonable efforts to mitigate the effects
Resume performance promptly once the event has passed

Failure to provide timely notice can waive the right to invoke force majeure, even if the underlying event qualifies.

What Happens During Force Majeure

The contract typically determines the consequences, but common outcomes include:

Performance suspended: Obligations are delayed for the duration of the event; the contract continues after the event passes
Termination right: If the force majeure event continues beyond a specified period (e.g., 90 days), either party may terminate the contract without penalty
Partial excuse: Only the affected portions of performance are excused; other obligations continue

Drafting Force Majeure Clauses

When negotiating or drafting force majeure clauses, consider:

List specific events explicitly -- including pandemics, government actions, and other foreseeable risks specific to your industry or geography
Specify whether the standard is "impossible" or "commercially impractical"
Include a termination right if the event extends beyond a defined period
Address price adjustment separately -- force majeure typically does not address cost increases; a separate price adjustment clause is needed for that

For contract drafting and review assistance, visit Talking Tree. This page is for informational purposes and does not constitute legal advice.