Force Majeure

FORCE MAJEURE: French for “superior force”
LAW = unforeseeable circumstances that prevent someone from fulfilling a contract

• Sept. 11th, Hurricanes, COVID
• Will you be able to cancel your meeting, class, performance without penalty/fees/breach?
  • Key tool in managing risk is the force majeure clause
• Force majeure clause relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, impracticable, illegal, or impossible.
• Without a force majeure clause, left to the mercy of the narrow common law contract doctrines of “impracticability” and “frustration of purpose” which rarely result in excuse of performance.
• Assistance of counsel:
  • Provisions that cover things such as: natural disasters like hurricanes, floods, earthquakes, and weather disturbances sometimes referred to as “acts of God.” Other covered events may include war, terrorism or threats of terrorism, civil disorder, labor strikes or disruptions, fire, disease or medical epidemics or outbreaks, acts of governmental authorities, etc.
  • Courts tend to interpret force majeure clauses narrowly. For example, while acts of terrorism might be a specified event, it does not necessarily follow that a court would also excuse a party’s performance based on “threats” of terrorism.
  • Thus, it is especially important to specify any types of circumstances that you anticipate could prevent or impede your performance.
  • Within Illinois law, there is an implied duty on the claiming party to make an effort to attempt to resolve the event causing delay or inability to perform under the contract before invoking a force majeure clause. This duty is related to the duty of good faith and is read into all express contracts unless waived.
  • The coronavirus has had a significant impact on businesses and their ability to perform under their contracts.
  • However, whether a claiming party can successfully invoke a force majeure clause, is a fact intensive inquiry and must be assessed on a case-by-case basis.