Real Estate Force Majeure Clause In Kings
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Definition of force majeure events Common examples include natural disasters such as earthquakes, floods, or hurricanes, acts of terrorism, strikes, government actions like new laws or orders, and other significant disruptions. The list of these specific events may vary depending on the contract.
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.
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.
What is a Force Majeure Clause? A force majeure (pronounced “forss ma-zhoor”) clause is a provision in a contract that allows one or both parties to excuse (or sometimes delay) their performance obligations if circumstances beyond their control arise. These circumstances are typically called “force majeure events.”
What Are Examples of Force Majeure? Events that could trigger a force majeure clause include war, terrorist attacks, a pandemic, or natural disasters that fall under the “act of God” category, such as a flood, earthquake, or hurricane.
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.
Neither Party shall be liable for failure of or delay in performing obligations set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes beyond the reasonable control of either Party.
Give Notice, If Necessary. Many clauses require the parties to give notice of a force majeure declaration a specific number of days before the event or within a certain time frame once the event is triggered. Make sure you're following terms and promptly give notice.
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.
A force majeure event has arisen. The party has been prevented (or delayed or hindered depending on the contract wording) from performing as a result of that event. The event was beyond the control of the party. There were no reasonable steps a party would take to avoid the event or mitigate its effects.
