Under normal circumstances, a contract obligates each party to perform their respective duties and obligations as outlined within the agreement. However, unforeseen events or circumstances beyond the control of either party, such as natural disasters, acts of terrorism or pandemics, can disrupt the ability of one or more parties to fulfill these obligations.
A force majeure clause typically outlines specific events or circumstances that would trigger its activation and specifies the rights and responsibilities of both parties in such situations. By including a force majeure clause in a lease agreement, parties can mitigate risks associated with unpredictable events and ensure a fair and reasonable approach to addressing disruptions beyond their control.
Provisions of a force majeure clause
The reliability of a force majeure clause is determined by the clarity of its language, the inclusivity of events or circumstances listed as triggering factors, and the specificity regarding the rights and obligations of both parties in the event of activation. Provisions may include the following.
Force majeure event
The clause should clearly outline what events qualify as force majeure events. These typically include natural disasters such as earthquakes, floods, hurricanes, or other extreme weather events, as well as acts of war, terrorism, riots, labor strikes, governmental actions and pandemics.
Mitigation efforts
While force majeure events occur for reasons beyond the control of the parties involved, the clause may specify that both parties are expected to make reasonable efforts to mitigate the effects of such events to the extent possible. This could include actions such as finding alternative means of fulfilling obligations, communicating effectively to minimize disruptions or seeking legal recourse if necessary.
Notice period
The affected party is typically required to provide prompt notice to the other party upon the occurrence of a force majeure event. This notice should include details about the event, its impact on the party’s ability to fulfill their obligations under the agreement, and any steps being taken to mitigate the effects. The notice period allows both parties to assess the situation and collaborate on potential solutions or adjustments to the terms of the agreement as necessary.
Seeking legal guidance can help ensure that a force majeure clause is drafted effectively and in accordance with applicable laws and regulations, maximizing its enforceability and providing clarity on the rights and obligations of both parties in the event of a force majeure event.
