Force majeure clauses

A “force majeure” clause sets out the parties’ rights and obligations when one or more parties are unable to perform the contract due to an event beyond their control (usually referred to as a “force majeure event”). Such clauses are particularly common in business and commercial agreements to supply goods or services or transport goods, as well as in building and construction contracts.

Authored by the LexisNexis Legal Writer team.

A “force majeure” clause sets out the parties’ rights and obligations when one or more parties are unable to perform the contract due to an event beyond their control (usually referred to as a “force majeure event”). Such clauses are particularly common in business and commercial agreements to supply goods or services or transport goods, as well as in building and construction contracts.

Broadly, a force majeure clause usually seeks to ensure that a party is not liable for a failure to perform its obligations due to a force majeure event occurring. In most cases, the clause will also:

• require a party affected by a force majeure event to notify the other parties;
• require a party affected by a force majeure event to take steps to remedy or minimise the adverse effects of the force majeure event;
• relieve the affected party from, and expressly suspend performance of, those obligations until the force majeure event ceases; and
• give a non-affected party (or in some cases each party) a right to terminate the agreement if the force majeure event continues for a significant period.

For specific guidance about force majeure in the context of COVID-19, see Guidance Note — Contracts and COVID–19 — Termination, frustration and force majeure.