Contracts can address the unexpected

Contracts can address the unexpected

| Jan 19, 2021 | Uncategorized |

The best laid business plans and agreements can become unraveled. But contracts can help protect businesses against the unexpected with a well-drafted force majeure clause.

Force majeure clause

Translated from the French, the term force majeure means greater force. These clauses usually apply to acts of nature and unavoidable events such as a hurricane or tornado for which no party may be held responsible. It also includes human actions such as war.

These events cannot be foreseeable, must be external to the contract’s parties and unavoidable. Force majeure events must make contract compliance impossible.

Force majeure clauses are usually strictly interpreted. It is difficult to show that an event is unforeseeable because it is expected that parties comply with their contractual obligations.

Foreseeability changing

The legal landscape over foreseeability has changed. Natural events such as solar flares, asteroids, and volcanoes were previously unanticipated. These events, and other environmental disruptions such as flooding caused by global warming are more predictable.

Likewise, there are human threats that are now foreseeable that were previously unheard of. These include malicious cyber activities, social engineering, biological and nuclear warfare capabilities, shutdowns, and boycotts.

Human conduct has also played a role in disruptions caused by nature. In addition to environmental harm coming from fuel emissions, other activities may cause natural disaster. Drilling and fracking, for example, have been blamed for causing earthquakes and other environmental problems.

Florida judicial opinions, changing events and the language of these clauses will determine whether a force majeure clause will have any effect. Attorneys can help draft these clauses and other important contract provisions and help protect a party’s rights.