Force majeure clause
A contractual clause exempting parties from liability in case of an unforeseeable, irresistible and external event making performance impossible.
A force majeure clause is a contractual provision that addresses the consequences of an unforeseeable, irresistible and external event that makes contract performance impossible or excessively onerous.
Common law systems do not have a statutory definition of force majeure, making the contractual clause itself the sole source of protection. The clause must therefore be carefully drafted.
The ICC offers a model force majeure clause (ICC Force Majeure Clause 2020) widely used in international trade. This clause lists presumed force majeure events (war, epidemics, sanctions, natural disasters) and provides mechanisms for notification, suspension and termination.
Key drafting considerations:
- Exhaustive list vs. general definition: a combination is recommended
- Notification obligations: time limits and form of notice
- Consequences: suspension of obligations, extension of deadlines, right to terminate
- Burden of proof: on the party invoking force majeure
The COVID-19 pandemic highlighted the critical importance of this clause. Companies must now adapt their clauses to account for pandemic risks, supply chain disruptions and international sanctions.