Many terms & conditions have a so-called ‘Force Majeure’ clause which most people ignore-usually because it features towards the end of the contract by which time they are seeing double and have lost the will to live!Added to that, we lawyers are reknowned for using bizarre latin phrases and ‘force majeure’ is probably one of them.Well, it isn’t. It is actually French and is often translated into ‘Act of God’. So what does this little clause do? It is rather like the ‘get out of jail free’ card in Monopoly and relieves a party to a contract from its obligations when certain events beyond its control happen. Say you sell exclusive chocolates with cocoa beans imported from South America. You sign up a massive deal with Harrods to supply them with chocolate santas. A storm hits the plantation and you are unable to supply the chocolate santas. Harrods get angry and want to sue you for the lost business, bad customer experience due to empty shelves..This is where you wave the ‘force majeure’clause at them and heave a big sigh of relief!
What is interesting is they type of event people try to lump into the ‘Act of God’ category. Would you accept strikes as a reason for someone to pull out of a contract?What about failing to back up one’s IT systems and they suddenly crash with total loss of data.You could argue that any prudent business would cater for just such an eventuality and that should not relieve the business from its obligations to you.
And now, what about this volcanic dust cloud.Thousands of flights grounded entailing, no doubt,interruption of supplies and personnel.It will be interesting to see if there will be a spate of claims for breach of contract and whether businesses have that all important little clause…
You might want to check your small print too 😉