Force majeure

Force majeure is a legal term most often used in contract law. It is derived from the French phrase for a “greater force” beyond human control or expectation. In a contract, or a binding agreement between two or more parties, the occurrence of a force majeure may make the agreement impossible to carry out as promised; the agreement may then have to be revised or discarded. Force majeure is an important concept in contracts, which are otherwise bound by law to be carried out. For that reason, many people study and debate force majeure claims to determine which incidents are truly and completely beyond the ability of humans to predict or avoid.

Force majeure is closely related to the concept of an “act of God,” which generally refers to a natural event, such as a flood, earthquake, or other disaster. However, unlike an act of God, a force majeure may sometimes be brought about by human actions, such as war. People seeking to break a contract for reasons of a force majeure must prove that the event could not have been reasonably predicted or prevented, thus freeing them from the obligation set out in the original contract.

Background

In the most basic sense, a contract is a serious agreement between two or more people or parties that must legally be carried out. A true, legally binding contract differs from other agreements, such as informal agreements, agreements made under duress, or agreements that are set out ambiguously.

A true contract requires four conditions. First, one party must present an offer to the other party or parties. Second, the offer must include an element of consideration, which, in legal terms, refers to a factor of value; for example, the offer may be to replace a car windshield for $350. (An offer to replace the windshield for free does not include the consideration and is legally considered a gift rather than an element of a contract.)

Third, the parties involved must accept the offer in a clear way, free of any ambiguities, that is stated in words or actions. This acceptance must agree to all the terms of the offer; any attempts to negotiate or evade terms will stop the agreement from becoming a contract. (People may also reject an offer outright or present a revised offer called a counteroffer, which may then, if accepted, form a new contract.) Fourth, a true contract is a mutual agreement, meaning that all affected parties met or talked in some way so that they could fully share their plans and reach a shared understanding. Evidence of hidden information or secretive dealings may invalidate a contract.

If all four elements are met, the agreement is a contract that, by law, must be carried out. People who seek to evade or dispute an agreement or a contract after it has been made must prove that some necessary element was missing, which would make the agreement not legally binding. The other way to legally escape or revise a contract is to prove that the terms of the contract were made impossible due to a force majeure.

Overview

In contract law, force majeure refers to a “greater force” that makes it impossible or unreasonable to carry out the conditions of a previously agreed-upon contract. Usually, force majeure events are natural catastrophes or other unavoidable negative occurrences that destroy the normal, reasonably expected course of events required by the terms of a contract. If such an event can be proven, a party to a contract may be allowed to legally break the contract or ask that it be altered to reflect the changed situation.

The term “force majeure” comes from the French language, and the idea it represents derives from French civil law, mainly the Napoleonic Code. Many countries have adopted that and similar codes throughout time. Other countries, including the United States, recognize force majeure events but require them to be more strictly explained and proven than in the original French rules. Force majeure is closely linked to the legal concept of an “act of God,” a usually negative event—often a catastrophic one such as a natural disaster—that makes it impossible for people to carry out their activities as usual or fulfill the terms of their contracts. However, a true act of God is usually considered purely natural, whereas some force majeure events may involve the actions of humans (specifically those who are not parties to the contract).

Scholars and legal experts study force majeure events, as well as the underlying concept of force majeure, in great depth and detail. The reason for this scrutiny is because, in practically all other events, a true contract must be carried out. Breaking a contract is breaking the law—except in very rare and serious conditions. Legal experts debate which events truly fit the definition of a force majeure, and this debate can become highly complex because it helps to maintain the integrity of the legal system.

For example, a farmer may contractually agree to deliver ten tons of crops to a market. However, a sudden flood of a nearby river wipes out the crop, leaving the farmer with nothing. The farmer has no choice but to break the contract; however, he claims that this move is legally acceptable because of a force majeure (a flood). In many cases, this would be acceptable. However, some legal experts might analyze the situation further and discover, for example, that the farmer had damaged the nearby riverbank while building an irrigation system and that damage allowed the flooding to reach destructive levels. In such a case, the claim of force majeure may be denied because the farmer should have known that his prior actions might have made flooding more likely. On a larger scale, legal experts disagree on how well-known environmental problems, particularly those caused by human activity, make catastrophic events more common and, therefore, more potentially foreseeable.

The COVID-19 pandemic was widely considered a potential force majeure event. However, its application varied in specific cases, depending on the wording of contract clauses and the legal frameworks of the contracts. If a contract specifically mentioned pandemics, it was easy to make a case for COVID-19 being a force majeure event. However, if pandemics were not specifically mentioned, the court had to examine whether the pandemic’s effects fit into broader established force majeure categories. The COVID-19 pandemic caused many businesses to revise their contracts to deal with these ambiguities. 

Bibliography

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“Force Majeure.” Legal Information Institute, Dec. 2021, www.law.cornell.edu/wex/force‗majeure. Accessed 27 Nov. 2024.

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“Force Majeure Sample Clauses.” Law Insider, www.lawinsider.com/clause/force-majeure. Accessed 27 Nov. 2024.

Hargrave, Marshall, et al. “What Is a Force Majeure Contract Clause?” Investopedia, 10 June 2024, www.investopedia.com/terms/f/forcemajeure.asp. Accessed 27 Nov. 2024.

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Sharma, Daniel H. “Coronavirus: The Second Wave and Force Majeure.” DLA Piper, 9 Dec. 2020, www.dlapiper.com/en/insights/publications/2020/12/covid-19-the-second-wave-and-force-majeure. Accessed 27 Nov. 2024.