Does extreme weather mean we can get out of our contract? What you need to know about force majeure clauses

Background
A “force majeure” (FM) clause can be included in a contract to waive a delay or failure to perform an obligation due to events or circumstances outside the ‘reasonable control’ of the party under that obligation (e.g. adverse weather conditions, such as flooding). Generally speaking, a FM clause will either suspend a contract for the period the FM event is continuing, or for a set period of time. Depending on the wording of the contract, the FM clause may come to your rescue or you may still be liable for the consequences of your failure to fulfil that obligation.

Definition of FM
Each contract will have its own definition of FM. The level of detail included in FM clauses can vary from one agreement to another, but some will set out examples, or even an exhaustive list, of events or circumstances considered to be beyond a party’s control. “Adverse weather” and specifically “flooding” will often make it into this list. Other clauses do not specify ‘weather’ but use general wording such as “any event or circumstance outside the party’s reasonable control”; in which case it will be a matter of interpretation and considering the full circumstances to determine whether bad weather is caught. 

Effect of FM clause
Either way, the party looking to rely on the FM event will often need to be able to show that this is the cause of their failure to uphold a contractual obligation and may have further obligations to comply with before they are “off the hook” (such as notification of the event and ‘reasonable efforts to comply’ requirements). 

Where a ‘defaulting’ party does not comply with the obligations under a FM clause or the FM event continues beyond the period defined in the contract, the ‘innocent’ party may terminate the contract (subject to its terms).

Comment
For many, little attention is paid to FM clauses when a contract is being negotiated but recent weather conditions remind us how important they can be.

Get in touch with our Corporate & Commercial team if you need help interpreting FM clauses in an existing contract or ensuring appropriate and enforceable FM clauses are included your contracts/T&Cs.