Clause primer
Force majeure clause
Excuses or suspends a party's performance when a defined event beyond its reasonable control prevents it from performing.
Legal information, not legal advice. What a clause does depends on its exact words, the rest of the agreement and the governing law.
Also called: FM clause, excused performance clause, act of God clause. Where you find it: Supply and distribution agreements, services and SaaS agreements, construction contracts, leases, event and hospitality contracts, and many other commercial agreements.
SAMPLE CLAUSE (INVENTED FOR THIS PRIMER)
Neither party is liable for any failure or delay in performing its obligations under this Agreement (other than obligations to pay money) to the extent caused by events beyond its reasonable control, including fire, flood, earthquake, epidemic, war, terrorism, civil unrest, government order or a general failure of public utilities, provided that the event could not have been prevented by reasonable precautions (each, a "Force Majeure Event"). The affected party must notify the other party promptly, describe the event and its expected duration, and use commercially reasonable efforts to resume performance. If a Force Majeure Event prevents performance for more than 60 consecutive days, either party may terminate this Agreement on written notice.
How it works
Excused obligations and payment carve-out
The clause excuses failure or delay only "to the extent caused by" the event, so unaffected performance must continue. Check whether the payment carve-out applies to both parties or only one.
Listed events and catch-all
The list names specific events, and the general phrase "beyond its reasonable control" is meant to capture others. Courts in many jurisdictions read force majeure clauses narrowly, so an event that is not listed and does not clearly fit the catch-all may not qualify.
Prevention test
The proviso requires that reasonable precautions could not have prevented the event or its effect. This ties the excuse to the affected party's own planning, such as backup systems.
Notice, mitigation and termination
Notice and efforts duties keep the other party informed and push the affected party to recover. The termination right caps how long a suspended contract stays alive; check the period and which party may terminate.
Why it is there
The clause allocates the risk of disruptive events that neither party caused and could not reasonably prevent. Without it, a party that cannot perform is left to general legal doctrines such as impossibility, impracticability or frustration, which are often narrow and uncertain. It mainly protects the performing party, usually a supplier or service provider, from liability for delay.
How it works with other clauses
- Service level and service credit provisions should state whether a force majeure event suspends credits, since otherwise the two clauses may conflict.
- Disaster recovery and business continuity obligations can narrow the excuse, because a party that promised backup capability may not be excused when it failed to provide it.
- Termination and refund terms determine whether prepaid fees are returned if the contract ends after a prolonged event.
Negotiating it
Who it protects: The party whose performance is affected, often the supplier or service provider.
If it protects you
- A broad catch-all for events beyond reasonable control, plus a list naming the risks most relevant to the business, such as epidemics, cyberattacks or supply chain disruption.
- Coverage for qualifying events that affect key subcontractors and suppliers.
- Realistic notice terms, such as "promptly," in place of a short fixed deadline that could forfeit the excuse.
If it runs against you
- Standard ask: exclude payment obligations, require prompt written notice and mitigation, and give the unaffected party a right to terminate after a fixed period.
- Fallback: if a broad catch-all stays, require that the event could not have been prevented by reasonable precautions, including compliance with any business continuity obligations.
- Exclude events within the affected party's control, such as its own labor disputes or the failure of its chosen vendors, unless those vendors were themselves hit by a qualifying event.
Escalate before accepting: A clause that excuses payment, applies only in the counterparty's favor, or lets the counterparty suspend indefinitely with no termination right is worth escalating.
What AI explanations get wrong
- Assuming a pandemic or government order is automatically covered. Check: read the listed events and catch-all, and see whether the clause requires that the event actually prevented performance.
- Treating increased cost or reduced profitability as an excuse. Check: look for language on economic hardship, since many clauses and courts do not treat higher cost alone as force majeure.
- Ignoring the notice requirement. Check: identify the notice deadline, form and recipient, and whether the clause makes notice a condition of relief.
Where the law varies
How narrowly courts read force majeure clauses, whether unlisted events fall within a catch-all, and how general excuse doctrines apply all depend on the governing law. Sales of goods may also be governed by Article 2 of the Uniform Commercial Code as adopted in the relevant state.
Sources
TOOLS
Need a primer like this for a clause in front of you? The Clause Primer Kit, included in All-access, produces one in this format inside the AI tool you already use, with checks built in. For reviewing whole agreements, see the Commercial Contracts Starter Pack.