How Can Force Majeure Clauses Affect Contract Litigation?

 Posted on May 04, 2022 in Litigation

There are a variety of issues that can lead to contract disputes, but much of the time, these cases will address claims that one party has committed a breach of contract and failed to meet their obligations under a contractual agreement. During litigation of these disputes, one party may invoke a “force majeure” clause in the contract and claim that they were excused from meeting their obligations due to circumstances beyond their control. By understanding when force majeure clauses may apply and how they can affect the litigation of contract disputes, the parties involved in these cases can make sure they will be able to protect their rights and financial interests.

What Is a Force Majeure Clause?

Most contracts contain terms that define when a party may not be required to fulfill its obligations. The term “force majeure,” which means “greater force,” may be used to refer to clauses in a contract that excuse one or both parties from certain obligations due to issues that are unforeseeable and out of their control. The circumstances that trigger a force majeure clause are often referred to as “acts of God,” and they may include natural disasters such as storms, floods, or earthquakes. Other issues that may be covered by these clauses include wars, riots, labor disputes, or other qualifying events that make it impossible for one party to meet their requirements.

If events occur that fall under a force majeure clause, the parties may have a number of options for handling the situation and reaching an agreement that will minimize the losses for both parties. In some cases, they may decide that the contract will still be carried out, but there will be a delay before one or both parties complete their requirements, such as delivering goods or making payments. In others, the parties may agree to a rescission, or a cancellation of the contract.

Disputes may arise if the parties cannot reach an agreement on how a force majeure clause will apply or whether a party should be excused from their obligations. If one party chooses to pursue litigation, the other party will generally need to show that the circumstances that led them to invoke the force majeure clause were unforeseeable and out of their control. Courts can vary on how broadly or narrowly they interpret force majeure clauses. In some cases, a court may decide that any public emergencies are sufficient to be considered an act of God that would affect a contract. However, other courts may choose to interpret force majeure clauses narrowly based on whether a situation was foreseeable. For example, businesses in Florida may believe that a hurricane is considered an act of God that will excuse them from certain contractual obligations, but a court may decide that because major storms happen on a regular basis, they should have been foreseeable, and a business should be expected to plan for delays or other issues that these storms may cause.

Contact Our Fort Lauderdale Business Contract Litigation Lawyer

Because interpreting the legal language in a contract can be a complex matter, it is crucial for businesses to be represented by an experienced lawyer when litigating these types of disputes. At The Elliot Legal Group, P.A., we can help determine how force majeure clauses may affect a contract dispute, and we can advocate on behalf of a business to ensure that these clauses are interpreted correctly. Contact our Sunrise contract litigation attorney at 754-332-2101 to get legal help with your case.

Sources:

https://www.law.cornell.edu/wex/force_majeure

https://www.investopedia.com/terms/f/forcemajeure.asp

http://www.flabizlaw.org/files/Florida%20Bar%20Force%20Majeure%20Materials.pdf