A majeure agreement, also known as a force majeure clause, is a contractual provision that excuses a party from performing its obligations under the agreement due to unforeseeable circumstances beyond their control. These circumstances may include acts of nature, war, strikes, or other events that make performance impossible or impracticable.
The purpose of a force majeure clause is to allocate risk between the parties when a catastrophic or unforeseeable event occurs. In such cases, the party invoking the clause is typically not liable for any damages or penalties for non-performance or delayed performance. This clause also protects the parties from potential breach of contract claims.
For a force majeure clause to be invoked, the event must be outside of the parties` control and either make performance impossible or significantly delay the performance. Additionally, the event must not have been reasonably foreseeable at the time of entering into the agreement.
The language of the force majeure clause must be specific to the agreement and the potential risks that are unique to the parties. A poorly drafted clause may not be enforceable or may be subject to interpretation by a court.
The COVID-19 pandemic is a recent example of an event that may trigger a force majeure clause in many agreements. The pandemic has caused disruptions in supply chains, travel, and work arrangements, making performance of some agreements impossible or impracticable.
In conclusion, a force majeure clause is an essential provision in a contract that protects parties from unforeseeable events that may impact their ability to perform their obligations. It is important that the language of this clause is specific to the agreement and the potential risks unique to the parties. An experienced attorney can assist in drafting a well-written force majeure clause that effectively allocates risk between the parties.