AUSTIN, Texas – While the term “force majeure” may sound complicated, the concept is actually simple. A force majeure clause temporarily or entirely allows a party to back out of a contract due to circumstances beyond a party’s control – this is not considered a breach of contract. Circumstances could be events such as war, extreme weather (sometimes referred to as “acts of God”), and changes in governmental regulations. A pandemic, such COVID-19, could also invoke a force majeure clause.
The idea behind a force majeure clause is to protect parties from being penalized for situations beyond their control. For example, a tornado on the day of a planned outdoor concert could invoke the protections of a force majeure clause because there is nothing an event organizer could have done to prevent a tornado. Accordingly, if the concert needed to be cancelled and the event organizer had a force majeure clause in their contract, they may have a strong defense to a breach of contract lawsuit.
Additionally, an act that invokes a force majeure clause must also not be reasonably foreseeable. In the above hypothetical situation, if it was reasonably foreseeable that there would be a tornado on the day of the concert, the organizers might not be able to use a force majeure clause as a defense. The Court may determine that the organizers should have anticipated extreme weather on that date and should have chosen a different day. A force majeure clause is reserved for truly unpredictable events that are out of the control of parties to a contract—such as COVID-19.
A force majeure clause cannot be invoked to protect a party from their own actions, however. For example, a party’s own negligent act would also not allow them to use a force majeure clause as a defense. A force majeure clause is solely for acts that are beyond the reasonable control of a party. Finally, many contracts do not even have a force majeure clause, as such events are so rare. A force majeure clause cannot be assumed; it must actually be in the contract itself.
If you have questions about a contract to which you’re a party and whether a force majeure clause is included or applies, consult an attorney to review the facts of your specific case.
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