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Force majeure (French for "greater force") is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as war, strike, riot, crime, act of God (e.g., flooding, earthquake, volcano), prevents one or both parties from fulfilling their obligations under the contract. However, Force Majeure is not intended to excuse negligence or other malfeasance of a party, as where non-performance is caused by the usual and natural consequences of external forces (e.g., predicted rain stops an outdoor event), or where the intervening circumstances are specifically contemplated. A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ...
In the most general sense, a liability is anything that is a hindrance, or puts individuals at a disadvantage. ...
For other uses, see War (disambiguation). ...
Teamsters, armed with pipes, riot in a clash with riot police in the Minneapolis Teamsters Strike of 1934. ...
Act of God is a common legal term for events outside of human control, such as sudden floods or other natural disasters, for which no one can be held responsible. ...
A flood (in Old English flod, a word common to Teutonic languages; compare German Flut, Dutch vloed from the same root as is seen in flow, float) is an overflow of water, an expanse of water submerging land, a deluge. ...
An earthquake is the result of a sudden release of stored energy in the Earths crust that creates seismic waves. ...
Cleveland Volcano in the Aleutian Islands of Alaska photographed from the International Space Station For other uses, see Volcano (disambiguation). ...
Negligence is a legal concept usually used to achieve compensation for accidents and injuries. ...
The expressions misfeasance and nonfeasance, and occasionally malfeasance, are used in English law with reference to the discharge of public obligations existing by common law, custom or statute. ...
Time-critical and other sensitive contracts may be drafted to limit the shield of this clause where a party does not take reasonable steps (or specific precautions) to prevent or limit the effects of the outside interference, either when they become likely or when they actually occur. A force majeure may work to excuse all or part of the obligations of one or both parties. For example, a strike might prevent timely delivery of goods, but not timely payment for the portion delivered. Similarly, a widespread power outage would not be a force majeure excuse if the contract requires the provision of backup power or other contingency plans for continuity.
(In the military, force majeure has a slightly different meaning. It refers to an event, either external or internal, that happens to a vessel or aircraft that allows it to enter normally restricted areas without penalty. A recent example would be the U.S. Navy aircraft that landed at a Chinese military airbase after a collision with a Chinese fighter. Under the principle of force majeure, the aircraft must be allowed to land without interference.)
Importance The importance of the Force Majeure clause in a contract, particularly one of any length in time, cannot be understated as it relieves a party from an obligation under the contract (or suspends that obligation). What is permitted to be a Force Majeure event or circumstance can be the source of much controversy in the negotiation of a contract and a party should generally resist any attempt by the other party to include something that should, fundamentally, be at the risk of that other party. E.g. in a coal supply agreement, the mining company may seek to have "geological risk" included as a Force Majeure event, however the mining company should be doing extensive exploration and analysis of its geological reserves and should not even be negotiating a coal supply agreement if it cannot take the risk that there may be a geological limit to its coal supply from time to time. The outcome of that negotiation, of course, depends on the relative bargaining power of the parties and there will be cases where Force Majeure clauses can be used by a party effectively to escape liability for bad performance. Coal Coal (IPA: ) is a fossil fuel formed in swamp ecosystems where plant remains were saved by water and mud from oxidization and biodegradation. ...
Chuquicamata, the second largest open pit copper mine in the world, Chile. ...
This article includes a list of works cited but its sources remain unclear because it lacks in-text citations. ...
In Hackney Borough Council v. Dore (1922) 1 KB 431 it was held that "The expression means some physical or material restraint and does not include a reasonable fear or apprehension of such a restraint".
The expression bears more extensive meaning than 'act of God' or vis major. As to delay due to breakdown of machinery, it comes within the words ‘force majeure’, which certainly cover accidents to machinery. The term cannot, however, be extended to cover bad weather, football matches or funeral. Matsoukis v. Priestman & Co (1915) 1 KB 681. Vis Major (vis may-jer), in Latin means ‘a superior force’ It means a greater or superior force; an irresistible force; It may be a loss that results immediately from a natural cause that could not have been prevented by the exercise of prudence, diligence and care. ...
The expression is undoubtedly a term of wider import than vis major. Judges have agreed that strikes, breakdown of machinery, which though normally not included in vis major, are included in force majeure.
In re Dharnrajmal Gobindram v. Shamji Kalidas [All India Reporter 1961 Supreme Court (of India) 1285] it was held that "An analysis of ruling on the subject shows that reference to the expression is made where the intention is to save the defaulting party from the consequences of anything over which he had no control".
Under international law it refers to an irresistible force or unforeseen event beyond the control of a State making it materially impossible to fulfill an international obligation. Force majeure precludes an international act from being wrongful where it otherwise would have been.
Sample Force majeure clause - "No Party shall be liable for any failure to perform its obligations where such failure is as a result of Acts of Nature (including fire, flood, earthquake, storm, hurricane or other natural disaster), war, invasion, act of foreign enemies, hostilities (whether war is declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation, terrorist activities, nationalisation, government sanction, blockage, embargo, labour dispute, strike, lockout or interruption or failure of electricity [or telephone service], and no other Party will have a right to terminate this Agreement under Clause 19 (Termination) in such circumstances."
- "Any Party asserting Force Majeure as an excuse shall have the burden of proving that reasonable steps were taken (under the circumstances) to minimize delay or damages caused by forseeable events, that all non-excused obligations were substantially fulfilled, and that the other Party was timely notified of the likelihood or actual occurrence which would justify such an assertion, so that other prudent precautions could be contemplated."
References
Sources - Mitra's Legal & Commercial Dictionary. Pages 350-351. 4th Edn. Eastern Law House. ISBN 8171770150
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