It’s been a while since my last legalese post but thought it would be good time for another. I have been reviewing contracts this week and was reminded about a the important legal term frequently used in contracts — “force majeure.”
Most legal terms are in Latin but “force majeure” is French for “superior force.” Usually contracts have a force majeure clause which will free a party of liability in the event that a “superior force” prevents the party from substantially performing under its obligations of the contract. Examples of “force majeure” include war, labor strike or lock-out, riots, crime, terrorist acts, epidemic, failure of plant machinery or common carrier, and Act of God (such as flooding, earthquake, drought, fire, and hurricanes).
The force majeure provision in the contracts would free a party of liability if it is unable to meet its obligations under the contract due to this superceeding event so long as the nonperforming party promptly provides notice of such limitation and makes a reasonable effort to decrease its harm or remove the force majeure. It is akin to an impossibility or impracticability defense in contracts.