7 Key Points of the Force Majeure Legal Doctrine
“Force Majeure” or “superior strength” clauses are often included in contracts as a way to excuse a party’s performance in the event that an act of god or other occurrence makes performance impossible. While historically these clauses have had little application, the Covid-19 pandemic is giving them new relevance. Given force majeure’s resurgence in today’s world, there are several key points that people need to know about force majeure:
“Force Majeure” is Contractual.
Force Majeure clauses can be included in contracts, but there is no statutory or common law force majeure in the State of California. If your contract does not have a force majeure clause, then the defense will not be available.
Force Majeure Clauses Govern its Application
Because force majeure is a contractual principal, its application is governed by the language of the force majeure clause at issue. Typically the events that will trigger a force majeure clause are specifically enumerated in the clause itself. If an event is not specifically listed in a force majeure clause, then that event likely will not trigger the provision.
Events Making Performance “Impractical” May Not Trigger Force Majeure
Even where a specifically enumerated event makes contract performance impractical, a force majeure clause may not be triggered. The force majeure event must cause “extreme and unreasonable difficulty, expense, injury, or loss.” A mere increase in expense does not excuse performance. (Butler v. Nepple (1960) 54 Cal. 2d 589, 599).
The Force Majeure Event Must be the Cause of the Failure to Perform
Just because a force majeure event occurs does not mean that performance is excused. The event itself must be the reason and the cause of the failure to perform. If a failure to perform is attributable to a party’s negligence, rather than the force majeure event performance will not be excused.
Force Majeure Event’s Must be Unforeseeable or Unpreventable
If a party could have prevented the force majeure event, or performed notwithstanding the event a force majeure clause likely will not be triggered. There must be an occurrence that “could not have been prevented by the exercise of prudence, diligence and care” in order for force majeure to apply. (Pacific Vegetable Oil Corp. v. C. S. T., Ltd. (1946) 29 Cal.2d 228, 238).
Force Majeure is Not Limited to “Acts of God”
While “acts of god” such as weather anomalies, and the Covid-19 pandemic may trigger a force majeure clause, human actions can be the subject of force majeure as well. Courts have found man made events such as war and labor strikes sufficient to trigger force majeure clauses.
“Stay at Home” Orders May Trigger a Force Majeure Clause
Because force majeure is not limited to acts of god, actions taken by state a local governments that make contract performance impossible may trigger a force majeure clause. This is extremely relevant in today’s climate given the significant actions being taken by State and local governments to combat Covid-19.
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