What is Force Majeure?
The Short Answer
Force Majeure explained simply
A "Force Majeure" clause in a contract protects both parties. It says that if an extraordinary event happens that nobody can control—like a natural disaster, war, or a pandemic—and that event stops one party from doing what they promised in the contract, then they won't be held responsible for not fulfilling their part. It’s about fairness when the unexpected hits.
Real-World Example
The Restaurant and the Hurricane
Imagine a restaurant owner who signed a contract to buy a new oven. Before the oven is delivered, a major hurricane hits the area, causing widespread power outages and making roads impassable. The oven supplier cannot deliver the oven, and the restaurant owner cannot receive it or pay for it due to the damage. A Force Majeure clause in their contract would mean neither party is in breach of contract because the hurricane was an unforeseen event beyond their control.
Why this matters
Force Majeure clauses are important because they protect you from situations you can't control. Without one, you could be sued for not meeting your contract terms, even if it was impossible to do so. It adds a layer of security and fairness to business agreements.
Always review the Force Majeure clause in any contract. Make sure it clearly defines what events are covered and what happens if one occurs. This protects your business from unexpected disruptions.
Always review the Force Majeure clause in any contract. Make sure it clearly defines what events are covered and what happens if one occurs. This protects your business from unexpected disruptions.
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