Richmond | Contract Law | Attorney
When certain uncontrollable events occur, a party involved in a business contract may not be able to hold up his end of the deal. To protect parties from legal repercussions in such situations, contracts often include a “force majeure” clause.
What Does Force Majeure Mean?
Literally, “force majeure” means “superior force.” Legally, it refers to a circumstance or event that is beyond the control of the parties bound by a contract. Events covered by force majeure typically include acts of God, riots, crimes, wars and strikes. “Acts of God” include volcanic eruptions, floods, hurricanes, tornadoes and earthquakes.
About Force Majeure Clauses in a Contract
Force majeure clauses are included in contracts to protect the involved parties from the breach of contract when the cause of the breech is uncontrollable. For example, if an earthquake occurs and a construction company is unable to finish its project by the date specified in the contract, a force majeure clause will release the company from the obligation.
When force majeure clauses are in effect, both parties will be released from their obligations when a triggering event occurs. In most cases, the relief from liability will only last as long as the force majeure continues. For example, a hurricane may relieve parties of their contractual obligations while it persists, but both parties must resume their duties when the hurricane passes.
The Importance of Wording in a Contract
When including a force majeure in any contract, it is important that the clause be well defined and that the author avoids overstating it. When force majeure is too broad, parties involved in the contract may take advantage of the clause and use it to relieve themselves from obligations they should have carried out.
Force majeure clauses are often a source of controversy. Though these clauses are supposed to protect parties from events they can’t control, some parties may be tempted to use the clause when an event should have been anticipated. For example, a mining company cannot claim force majeure when geological risks cause them to breech a contract because mining companies are responsible for assessing such risks before the mining process begins.
The structure of a business contract is extremely important. If you plan to enter into any agreement, it’s wise to involve a qualified attorney. Whether you need the attorney to write a contract or simply look one over, soliciting advice from a professional can prevent you from losing time and money because of a poorly-written contract.
Law Office of Ryan C. Young, PLLC | Richmond, Virginia | Business Law