Thank You For Submiting Feedback!
Force majeure is an event that can be neither anticipated nor controlled. A force-majeure clause is a clause allocating the risk if performance becomes impossible or impracticable as a result of an event or effect that the parties could not have anticipated or controlled. A force-majeure clause is not intended to shield a party from the normal risks associated with an agreement.
In January 1999, appellant company entered into a production contract with the appellee dairy for the production of ice cream. On March 27 there was an explosion at the dairy's ice cream manufacturing facility. On August 18 the company entered into a contribution and assumption agreement with the third-party to form a joint venture, and this agreement reflected the parties' intention to combine certain assets. The company sent the dairy a notice of assignment on October 20. The company later filed suit against the dairy. The dairy filed a motion for summary judgment on the grounds that the company was not the real party in interest and the force-majeure clause in the parties' production contract relieved the dairy of performance. The district court granted summary judgment in favor of the dairy.
The court ruled that genuine issues of material fact existed as to whether the company was the real party in interest. Also, the dairy was not entitled to summary judgment based on the force-majeure clause. The contract was not reasonably susceptible to more than one interpretation, and the dairy's interpretation was inconsistent with the common understanding of a force-majeure clause and the purpose of a production contract that required specific performance to be completed in a specified period.