Construction Contracts Force Majeure In Wake
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Force majeure events are usually defined as certain acts, events or circumstances beyond the control of the parties, for example, natural disasters or the outbreak of hostilities.
A “force majeure” (FM) clause can be included in a contract to waive a delay or failure to perform an obligation due to events or circumstances outside the 'reasonable control' of the party under that obligation (e.g. adverse weather conditions, such as flooding).
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.
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.
Commonly referred to as “acts of God”, force majeure events are unforeseeable, exceptional or out with the control of contracting parties. Examples include natural disaster, terrorism, industrial strike action, fire and pandemic/epidemic events such as Covid-19.
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.
The key aspect here is that the event was not foreseeable at the time the contract was made. Applying these definitions to climate change-related events like wildfires and floods, one could argue that they may qualify as force majeure events since they are typically classified as acts of God.
Only if the rain is extraordinary heavy, for example causing heavy flooding, then it can be treated as Force Majeure. One should also evaluate the impact of the rain or flooding to consider what is fair to be treated as Force Majeure.
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.
