Contract Law Force Majeure In Phoenix
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The major difference in such cases is that, without a force majeure clause, the party that wants to be released from contract obligations has the burden of proof, which means that this party must prove their argument is correct. If the other contracting parties do not agree, this could lead to litigation.
Force majeure clauses can prevent financial losses by relieving parties from liability for non-performance due to circumstances beyond their control, ensuring that neither side is held accountable for breaches in such cases.
If a contract is silent on force majeure or if the event does not meet the definition of force majeure under the parties' contract, a party's performance may still be excused in certain circumstances under the doctrine of commercial impracticability.
Termination — In cases where the force majeure event is severe and long-lasting, the contract may allow for its termination, meaning the parties are released from their obligations entirely because the event has made it impossible or impractical to continue with the contract.
performing party may use a force majeure clause as excuse for nonperformance for circumstances beyond the party's control and not due to any fault or negligence by the nonperforming party.
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.
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.
Termination — In cases where the force majeure event is severe and long-lasting, the contract may allow for its termination, meaning the parties are released from their obligations entirely because the event has made it impossible or impractical to continue with the contract.
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.
If force majeure continues to a point where performance would be radically different from that contemplated, the contract will be frustrated, and terminated, without recourse by either party.
