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What you need to know about a force majeure clause

On Behalf of | Dec 22, 2021 | Uncategorized

As a contractor, you’ve learned to plan for just about every eventuality before you begin a project. However, sometimes things are simply beyond your control. That’s why construction contracts need a force majeure clause to prevent them from being held liable if something unforeseen occurs that prevents them from finishing the project on time.

Force majeure literally means “superior force.” It’s often used to refer to things considered to be “acts of God” – like hurricanes, floods and other natural disasters that Floridians know all too well. However, a force majeure can also be anything from a sudden material shortage or labor strike to a terrorist attack.

What details should you include?

As with all contract clauses, thoroughness and specificity are key. It’s crucial to define under what conditions the force majeure clause will go into effect. It’s also important to detail things like how and when the relevant parties will be notified if a contractor is invoking the clause and what their obligations are to the project if it has to be delayed or abandoned. 

Just having a force majeure clause doesn’t mean that you can invoke it without risking liability. A customer might be able to successfully argue to a court that you should have foreseen the event (such as a shipment delay, material shortage or strike) and had a backup plan. Staying in touch with the customer and giving them an alternate plan of action can often help prevent them from going to court.

Most businesses want to finish their projects as promised. They aren’t looking for excuses to get out of them. That’s why a force majeure clause is typically invoked only when it is absolutely necessary. However, it’s crucial to have a well-crafted contract that allows you a little breathing room if something you couldn’t have predicted or planned for delays or derails the project.