Force Majeure

Force Majeure is a contractual clause that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents one or both from fulfilling the contract. These events may include natural disasters, wars, pandemics, or government actions.

In procurement, force majeure clauses protect buyers and suppliers from penalties or breaches caused by unforeseeable disruptions. The clause typically defines what constitutes a force majeure event, notification procedures, and how long performance can be suspended before termination is considered.

It is a critical risk management tool in supply contracts, especially in global and long-term agreements.

✅ Common usage: “The supplier invoked the force majeure clause after port closures delayed shipments due to a hurricane.”

❓ Frequently Asked Questions

What events are typically considered Force Majeure?

Events typically considered Force Majeure include natural disasters like earthquakes, floods, and hurricanes, as well as human actions such as wars, strikes, and government actions that are beyond the control of the contracting parties.

How does a Force Majeure clause affect procurement contracts?

A Force Majeure clause in procurement contracts allows parties to suspend or terminate their obligations without penalty if a Force Majeure event occurs. It provides a legal basis for non-performance due to circumstances beyond their control.

Is Force Majeure applicable to all procurement contracts?

Force Majeure is not automatically applicable to all procurement contracts. It must be explicitly included in the contract terms and conditions. The specific events covered and the procedures to invoke the clause should be clearly defined in the contract.

How can parties prove a Force Majeure event has occurred?

To prove a Force Majeure event, parties typically need to demonstrate that the event was unforeseeable, beyond their control, and directly prevented them from fulfilling their contractual obligations. Documentation and evidence of the event and its impact are usually required.

Can Force Majeure clauses be negotiated in procurement contracts?

Yes, Force Majeure clauses can be negotiated in procurement contracts. Parties can agree on the specific events that will be considered Force Majeure, the notice period required, and the consequences of invoking the clause.

What should be included in a Force Majeure clause?

A Force Majeure clause should include a definition of what constitutes a Force Majeure event, the obligations of the parties during such an event, the process for notifying the other party, and the rights and remedies available to both parties.

How does Force Majeure differ from other contract clauses?

Force Majeure differs from other contract clauses in that it specifically addresses the inability to perform due to extraordinary events beyond the control of the parties. Other clauses may deal with performance issues, but Force Majeure provides a legal excuse for non-performance under specific conditions.