What is a Force Majeure clause?

What is a Force Majeure clause?

A force majeure clause is a method of allocating the risk of a disruptive event. It is a broad catch-all provision whereby the parties list categories or specific instances of otherwise frustrating events, together with the party or parties to bear the risk of the event occurring.

The clause can also grant options to vary, suspend or terminate the contract to one or more of the parties. [1]

Force majeure clauses form part of a contract’s express terms, subject to the conventional methods of construction.

Absent a force majeure clause, it is unlikely a contract’s commercial purpose would suggest that such a provision is so apparent that it goes without saying [2], meaning a court is likely to refuse to imply it.

Further Reading:

For a more detailed discussion please refer to our blog article “Force Majeure Clauses & Frustration: Why the COVID-19 Pandemic is a Wake-Up Call" by Shakvaan Wijetunga | Virtual Intern at Blue Ocean Law Group℠.

Footnotes:

[1] Eg., Yara Nipro P/L v Interfert Australia P/L [2010] QCA 128, [26].

[2] BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, 283.

Important Notice:‍

This FAQ is intended for general interest + information only.

It is not legal advice, nor should it be relied upon or used as such.

We recommend you always consult a lawyer for legal advice specifically tailored to your needs & circumstances.