Force Majeure Clause: Definition & Meaning in Contract Law

Force Majeure Clause: Definition & Meaning in Contract Law

What does 'force majeure' refer to in contract law?

A) An unforeseen event or circumstance beyond the control of the parties.

B) Intentional interference with the performance of a contract.

C) Breach of contract by one party.

D) The transfer of contractual rights and obligations to another party.

Correct Answer: A) An unforeseen event or circumstance beyond the control of the parties.

Explanation:

'Force majeure' is a French term that literally translates to 'superior force.' In contract law, it refers to an unforeseeable event or circumstance that is beyond the control of either party and prevents one or both parties from fulfilling their contractual obligations.

Examples of events typically considered 'force majeure' include:

• Natural disasters (e.g., earthquakes, floods, hurricanes)* War, terrorism, and political unrest* Pandemics and epidemics* Government actions (e.g., embargoes, expropriation)

A 'force majeure' clause in a contract outlines the specific events that qualify as 'force majeure' and the consequences of such an event. This often includes:

• Suspension of contractual obligations* Extension of deadlines* Termination of the contract

It's crucial to note that the specific events considered 'force majeure' can vary depending on the contract and jurisdiction. Therefore, it's essential to carefully review and understand the 'force majeure' clause in any contract.