Even contracts that contain force majeure clauses risk being sued if the clauses are vague, generic or poorly worded. Indeed, in disputes relating to construction contracts, it is common for the parties not to agree on events specifically “force majeure” or not. Disputes of this kind often depend on a judge`s decision as to whether the event in question was “reasonably foreseeable”. If the event was not reasonably foreseeable – such as the rapid melting of an unusually large amount of snow that caused the withdrawals to burst and trigger unprecedented flooding – then the event is likely to be considered an act of force majeure and non-compliance with the party, at least for some time, will be excused. If the event was reasonably foreseeable – such as a fifty-mile-per-hour wind gust blowing on I-80 – then it is determined that the event is not an act of force majeure and therefore the injured party is not excused for its non-performance. A well-drafted construction contract avoids the costs and risks associated with litigation. We all hope that the current crisis will be resolved as soon as possible, but owners, contractors and businesses should ensure that their contracts are reviewed immediately so that they can determine the rights of the parties in relation to the impact of the pandemic. Droughts as forces of nature are generally understood as force majeure events. Government measures, including war, can also be considered cases of force majeure in many cases. However, you should understand that cases of force majeure are not limited to these categories. In fact, many treaties explicitly describe what constitutes one of these events.
Douglas V. Bartman is a construction litigator at Berns, Ockner & Greenberger in Beachwood, Ohio. It`s also worth noting that while force majeure clauses are typically used in natural disaster circumstances — such as the catastrophic Nebraska floods in 2019 — cautious wording can also extend a clause`s coverage to a wide range of other unforeseen or unpredictable circumstances, ranging from labor strikes and industry-wide material shortages to acts of terrorism. Imagine that work on a project in Florida has begun. Two weeks after construction, a Category 5 hurricane makes landfall in your area. Without a force majeure clause in the construction contract, a contractor could potentially be sued for not completing their work on time! Force majeure clauses, such as those in the example above, help protect the parties from liability if the performance of their termination of business has become unenforceable, impossible or even illegal due to circumstances beyond their control. Therefore, these clauses are essential for any construction contract. Without them, the parties must rely on the “doctrine of impossibility” and the “doctrine of frustration of purpose” – abstract theories of contract law whose litigation is costly and which does not always lead to the excuse of performance. In the world of construction contracts, terms that refer to an “act of God” are commonplace. “Force majeure events” – also known as force majeure events – are natural disasters (or other destructive events) that are completely beyond human control. Common examples of force majeure include hurricanes, earthquakes, tornadoes, and tsunamis.
Catastrophic flooding can also be a force majeure event in which flooding in a particular area is unusual or dramatically worse than could reasonably have been expected – just like the floods that hit eastern Nebraska in March 2019. Notably, some home insurance policies cover damage to the home itself related to certain acts of force majeure, but not to other buildings or structures owned by the policyholder. The French term force majeure literally means “upper force”. The concept is generally defined as an “event or effect that cannot be anticipated or controlled” that “prevents someone from doing something they have agreed or officially planned.” Many contracts contain force majeure clauses that excuse performance in such unforeseen circumstances. Force majeure clauses are intended to cover events that neither party can control. But determining exactly what types of events will trigger the clause is crucial! Natural disasters are just one type of triggering event. These clauses can also cover a range of other events, from labor strikes and material shortages to acts of terrorism and wars. In the midst of the COVID-19 chaos, companies are relying on the clauses in the file in their contracts to avoid any liability for the performance of their contractual obligations.
The extent to which the force majeure clause releases them, in whole or in part, from their contractual obligations is unclear. In any case, it depends on the wording of the contract itself. Many contracts contain provisions that release one or both parties from the performance of their contractual obligations due to the occurrence of an event beyond the control of the parties and making performance impossible or almost impossible. These provisions are provisions on “force majeure” (French for “force majeure”), and they often list an “act of force majeure” as one of the events that excuse the performance of the contract. A “force majeure event” for the purposes of a commercial contract is generally an extreme weather event such as a hurricane, blizzard, flood or similar natural event. A force majeure clause releases part of the performance of a contractual obligation in certain circumstances that would make performance impracticable, impossible or even illegal. The term translates to “upper force” – and it`s a good indicator of when these clauses come into play: when superior external forces such as a storm or natural disaster affect a project participant`s ability to successfully complete or complete their tasks in a construction project. Force majeure clauses can provide the most enforceable defense against claims related to cessation of construction, delays, and rental obligations, although other objections may be available, such as frustration of purpose and impossibility. There are many variations of force majeure clauses, some of which explicitly deal with pandemics and others can be invoked to combat pandemics.