Contract Law Force Majeure In Arizona
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Force majeure clauses are contractual clauses which alter parties' obligations and/or liabilities under a contract when an extraordinary event or circumstance beyond their control prevents one or all of them from fulfilling those obligations.
The Force Majeure clause should clearly identify the obligations that will be excused in the event of a Force Majeure event. The clause may specify that all obligations will be excused or only certain obligations, depending on the nature of the contract and the parties' preferences.
For events to constitute the use of force majeure, they must be unforeseeable, external to contract parties, and unavoidable. Force majeure means “greater force” and is related to an act of God, an event for which no party can be held accountable.
Neither party will be liable for inadequate performance to the extent caused by a condition (for example, natural disaster, act of war or terrorism, riot, labor condition, governmental action, and Internet disturbance) that was beyond the party's reasonable control.
Either Party shall be excused from performance and shall not be in default in respect of any obligation hereunder to the extent that the failure to perform such obligation is due to a Natural Force Majeure Event.
Because the concept is foreign, lawyers who review or draft contracts governed by U.S. law should start with the assumptions that 1) principles of force majeure will not be implied in a contract that does not expressly provide for them, and 2) U.S. courts will interpret and apply force majeure provisions narrowly.
Sample Language 3 The Parties hereby acknowledge that while current events related to the current epidemic/pandemic are known, future impacts of the outbreak are unforeseeable and shall be considered a Force Majeure event to the extent that they prevent the performance of a Party's obligations under this Agreement.
Force majeure is a clause included in contracts to remove liability for unforeseeable and unavoidable catastrophes that prevent participants from fulfilling obligations. These clauses generally cover natural disasters and catastrophes created by humans.
If a contract does not include a force majeure provision, a party may nonetheless be excused from performance under the concept of commercial impracticality.
The definition of "force majeure" generally includes "risks beyond the reasonable control of a party, incurred not as a product or result of the negligence of the afflicted party, which have a materially adverse effect on the ability of such party to perform its obligations".
