Bexar Texas Negotiating and Drafting the Force Majeure Provision

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Multi-State
County:
Bexar
Control #:
US-ND1103
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Description

This form provides boilerplate Force Majeure contract clauses that outline the definition and effect of a Force Majeure event on a contract agreement. Several different language options are included to suit individual needs and circumstances.


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FAQ

A typical force majeure clause includes a statement that the occurrence of certain events or circumstances will excuse performance; a listing of the events or circumstances; and a listing of obligations imposed on the party claiming to be excused that typically relate to keeping the other party informed about the force

For example, parties in the United States have used the COVID-19 pandemic as a force majeure in an attempt to escape contractual liability by applying the elements of an (1) unforeseeable event, (2) outside of the parties' control, that (3) renders performance impossible or impractical.

To enforce a force majeure clause a company must also prove that the force majeure event defined in the contract has caused an inability to perform the contract obligation. For example, imagine there is a U.S. company that is producing a product and requires a component from a Chinese factory to complete its product.

Force majeure examples War, riots, earthquakes, hurricanes, lightning, and explosions, for example, are force majeure events. The term also includes energy blackouts, unexpected legislation, lockouts, slowdowns, and strikes.

Examples of events that might trigger a force majeure clause into effect include a declaration of war, a disease epidemic, or a hurricane, earthquake, or other natural disaster events that fall under the legal term, act of God.

Neither Party will be liable for any failure or delay in performing an obligation under this Agreement that is due to any of the following causes (which causes are hereinafter referred to as Force Majeure), to the extent beyond its reasonable control: acts of God, accident, riots, war, terrorist act, epidemic,

Generally the following will need to apply: 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.

For example, parties in the United States have used the COVID-19 pandemic as a force majeure in an attempt to escape contractual liability by applying the elements of an (1) unforeseeable event, (2) outside of the parties' control, that (3) renders performance impossible or impractical.

There are four necessary components of a force majeure clause: It must define the breach for which a promisor seeks to be excused. It must define the force majeure event itself. It must require (and define) the causal connection between these two. It must explain what will happen if performance is excused.

A force majeure clause allocates the risk of loss if performance is hindered, delayed, or prevented because of an event that the parties could not have anticipated or controlled. It provides a contractual defense, the scope and effect of which will depend on the express terms of a particular contract.

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Bexar Texas Negotiating and Drafting the Force Majeure Provision