Croessmann & Westberg Home
Remember that COVID-19 thing in 2020? You might want to add a force majeure clause in your contracts.
Pandemics and other unforeseen events may hinder a contractor’s ability to perform his duties. In the case of unforeseen events, force majeure clauses may provide parties some relief when figuring out to whom duties are owed. Typically, force majeure clauses are standard “boilerplate” language in all contracts but is still an important clause to make sure is included in your agreements. These clauses outline what will happen in the case of an event so disastrous that neither party can perform their duty to the other. These events may be things such as pandemics, floods, fires, acts of God, etc.
Four necessary parts of a force majeure clause include (1) a definition of the breach for which a promisor seeks to be excused, (2) a definition of the force majeure event itself, (3) a requirement and definition of the causal connection between the two, and (4) an explanation of what will happen if performance is excused. These four parts will help a court enforce the clause appropriately if an issue arises regarding these unforeseen events. In case another pandemic occurs, courts did rule that pandemics are a force majeure event, like natural disasters. Businesses should be sure to review force majeure clauses in contracts they sign to understand their implications and be sure they are not one-sided.
