What Is Force Majeure?
Force majeure — French for "superior force" — refers to extraordinary events beyond the reasonable control of either party that prevent them from fulfilling their obligations under an agreement. When a valid force majeure event occurs, the affected party may be excused from performance without being in breach of the agreement.
The concept has existed in contract law for centuries, but it gained renewed attention during the global disruptions of recent years. Events that were once considered purely hypothetical — worldwide pandemics, widespread supply chain collapses, coordinated cyberattacks — demonstrated that force majeure clauses are far from boilerplate.
Why Force Majeure Clauses Matter
Without a force majeure clause, a party that cannot perform due to extraordinary circumstances may still be considered in breach of the agreement. The non-performing party could face liability for damages, termination fees, or other consequences specified in the contract.
A force majeure clause provides a contractual safety valve. It acknowledges that certain events are beyond anyone's control and establishes a fair process for handling the disruption without penalizing the affected party.
What Events Typically Qualify?
Force majeure clauses generally include a list of qualifying events, followed by a catch-all provision. Common triggering events include:
Natural Disasters
- Earthquakes, hurricanes, floods, tornadoes
- Volcanic eruptions, tsunamis
- Severe weather events that prevent travel or operations
Government Actions
- War, military conflict, terrorism
- Government-imposed sanctions, embargoes, or trade restrictions
- Changes in law or regulation that make performance illegal
- Mandatory shutdowns or quarantine orders
Infrastructure Failures
- Widespread power outages beyond the party's control
- Internet or telecommunications failures
- Transportation system shutdowns
Public Health Emergencies
- Pandemics and epidemics
- Quarantine orders
- Public health emergency declarations
Labor Disruptions
- Strikes or labor disputes (sometimes limited to those not involving the party's own employees)
- Industry-wide labor shortages
Cyber Events
- Distributed denial-of-service attacks
- Widespread ransomware or malware incidents
- Critical infrastructure cyber attacks
Be explicit about which events qualify as force majeure. Courts often interpret these clauses narrowly, meaning an event not specifically listed may not be covered even if it seems like it should qualify.
What Does Not Qualify as Force Majeure
Force majeure clauses are not a catch-all excuse for non-performance. Events that typically do not qualify include:
- Financial difficulties — Running out of money, losing a key customer, or facing a market downturn
- Internal operational issues — Equipment failure, staff turnover, or poor planning
- Foreseeable events — Seasonal weather, known regulatory changes, or recurring labor disputes
- Subcontractor failures — Unless the subcontractor's failure was itself caused by a force majeure event
- Ordinary business risk — Price increases, competitive pressure, or changes in demand
The general principle is that force majeure covers events that are unforeseeable, unavoidable, and outside the affected party's control.
How a Force Majeure Clause Works
Notification
The affected party must notify the other party promptly — typically within a specified number of days — that a force majeure event has occurred. The notice should describe the event, explain how it prevents performance, and estimate how long the disruption will last.
Mitigation
The affected party is typically required to take reasonable steps to mitigate the impact of the event. This might include finding alternative suppliers, implementing backup systems, or redirecting resources. Force majeure does not excuse the party from trying to find workarounds.
Suspension of Obligations
During the force majeure period, the affected party's obligations are suspended. They are not required to perform, and they are not considered in breach. However, obligations that can still be performed (such as payment for services already rendered) typically remain in effect.
Duration Limits
Most force majeure clauses include a maximum suspension period. If the event continues beyond this period (commonly 60 to 180 days), either party may terminate the agreement without liability. This prevents the parties from being indefinitely bound to an agreement that cannot be performed.
Force majeure suspends obligations — it does not eliminate them. Once the event passes, the affected party is expected to resume performance as quickly as reasonably possible.
Drafting Considerations
Specific vs. Broad Language
Include a specific list of qualifying events rather than relying solely on general language. Courts are more likely to enforce a clause that explicitly names the event at issue. Follow the specific list with a narrow catch-all like "and other events beyond the reasonable control of the affected party that could not have been foreseen or avoided."
Mutual Application
Force majeure should apply to both parties. The provider might be unable to deliver services due to a natural disaster, and the client might be unable to pay due to a government-imposed banking freeze. Both scenarios should be covered.
Relationship to Other Clauses
Consider how the force majeure clause interacts with other provisions in your agreement:
- SLA commitments — Are SLA credits suspended during a force majeure event?
- Termination rights — Can either party terminate if the event exceeds a specified duration?
- Payment obligations — Does force majeure excuse payment for services not rendered during the disruption?
- Insurance — Does either party carry business interruption insurance that covers force majeure events?
Pandemic-Specific Language
Given recent history, many modern service agreements include specific pandemic-related provisions. These might address remote work accommodations, reduced service levels during public health emergencies, or modified payment terms during extended disruptions.
Creating Your Service Agreement
A well-drafted force majeure clause provides both parties with a fair framework for navigating extraordinary disruptions. It protects the affected party from breach liability while giving the other party clear information and eventual exit options.
PactDraft includes force majeure provisions in its service agreement templates, covering common triggering events, notification requirements, mitigation obligations, and duration limits. Generate a service agreement that prepares your business for the unexpected.