Force Majeure revisited: When Life Is Not a Gas
A force majeure clause in a contract is a provision that excuses a delay or failure in performance due to events or circumstances outside the reasonable control of the person required to deliver that performance.
We’ve written about this subject before in the context of snow, foot & mouth disease and a strike by fuel tanker drivers; who would have thought that the subject would come up again as a result of a shortage of carbon dioxide.
If you are under an obligation to supply and you find yourself unable to fulfil that obligation as you cannot obtain deliveries of CO2, will the force majeure clause in the contract come to your rescue?
The answer is that it depends on the wording of the clause. Some clauses expressly include as force majeure events circumstances such as failure by sub-contractors and shortages of supplies of raw materials. Other clauses expressly state that those are not force majeure events. Other clauses use general wording such as “any event or circumstance outside the party’s reasonable control”; in that case it will be a matter of interpretation.
Little attention is often paid to this type of clause when a contract is being negotiated. But events like this remind us that they can be very important.
If you have questions, we can help. Please get in touch.
This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.