Contractual Force Majeure-based Provision
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A Contractual Force Majeure-based Provision is a contractual provision that addresses the consequences of extraordinary events or circumstances beyond the control of the contract parties that prevent or hinder performance under the contract.
- AKA: Force Majeure Provision.
- Context:
- It can cover various types of events, such as natural disasters, wars, strikes, government actions, and other unforeseen circumstances that make performance impossible or impracticable.
- It can (often) include:
- It can range from being an Atomic Force Majeure Provision to being a Comprehensive Force Majeure Provision.
- It can range from being a Single Element Force Majeure Provision, a Two Element Force Majeure Provision, to being a Many Element Force Majeure Provision.
- It can range from being a General Force Majeure Provision to being a Contract-Specific Force Majeure Provision.
- It can range from being an Unconditional Force Majeure Provision (where the consequences apply automatically upon the occurrence of a force majeure event) to being a Conditional Force Majeure Provision (where the consequences are subject to certain conditions or limitations).
- It can provide crucial legal relief in situations where non-performance is unavoidable, thus protecting the parties from breach of contract claims.
- Example(s):
- a Construction Contract delayed by an unexpected hurricane, invoking the force majeure clause to extend deadlines.
- a Supply Agreement interrupted by political unrest in a key supplier's country, activating force majeure to suspend delivery obligations.
- Counter-Example(s):
- a Service Contract where an economic downturn impacts a company's profitability but does not constitute a force majeure event.
- Routine Maintenance or predictable seasonal weather that does not meet the threshold for force majeure.
- See: Business Interruption Insurance, Legal Doctrine of Impossibility.