Force Majeure — When Does It Excuse A Contract Breach?

Contracts are a vital part of doing business. And when one party can not or will not fulfill their end of the contract, the other side can sue for damages they suffer. Whether you're the one who breached the contract or you are the innocent party, a key part of the argument often involves force majeure.  

What does this mean? When does it apply? And, just as importantly, when doesn't it apply? Here are some answers every business owner needs. 

What Is Force Majeure?

Latin for "superior strength," force majeure refers to forces beyond a party's control that directly cause them to breach their duty in a contract. 

Many contracts include a clause relieving either party from their contractual obligations if such an event occurs. And if there is no clause, it may be used as a defense against financial damages in court. 

What Are Some Examples?

Certainly, the most appropriate use of force majeure as a defense during contract disputes is after a natural disaster. After all, no one can prevent — or even reliably predict — an earthquake. 

So-called acts of God are not the only types of force majeure events, though. Man-made activities can trigger this clause or defense. For instance, if a riot starts in your business neighborhood and makes it impossible for your employees to come to work, you may not be able to fulfill an order. The civil unrest is beyond your control, and it becomes unreasonable to expect you or them to risk their lives to fulfill that order. 

When Is Force Majeure Not a Defense?

Remember that force majeure covers things that make it impossible or unreasonable to fulfill the contract. If your inventory was destroyed in a hurricane, it's impossible to fulfill a purchase order. 

However, inconvenience or impracticality — even losing money or having to turn down other work — doesn't qualify for a force majeure defense. If the hurricane made a mess of your property but spared the actual inventory, you may still be able to deliver it. If your own delivery truck was damaged but you can rent a truck for the trip, you can still fulfill the contract. 

Where Can You Start?

Did something beyond your control cause you to breach a contract? Is someone else claiming force majeure to defend their breach against you? Reach out to a business attorney in your area to learn more. 

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