Force Majeure: Are Pandemics an Act of God?

By: Matthew Denson, Esq.

Force Majeure clauses are commonly seen in contracts to protect against the unknown. Something could go wrong, and it could completely ruin your contract. What if you planned months in advance to hold an event, only for a hurricane to arrive on the day of your event? More importantly, how do you plan for something that by definition is unforeseeable?

What is a Force Majeure clause?

Force Majeure is French for “superior force.” They are also sometimes called “Acts of God” clauses. The idea behind a Force Majeure clause is to excuse performance of a contractual obligation should a completely unforeseen event disturb the contract. Normally, a long laundry list of events is given. These usually include some normal events like hurricanes, floods, and blizzards, but they can also include far more extreme events like acts of terrorism, civil wars, and even meteor strikes. This means that if one of the events occurs, one or both parties can excuse performance.

The Pandemic: Did YOU see it coming?

Foreseeability is often a major roadblock when drafting a strong Force Majeure clause. If you had asked anyone a decade ago if we would be experiencing a global pandemic where lockdowns across the planet were required, they would think it was something straight out of a science fiction novel.

A key component of Force Majeure clauses is that they must list with specificity all the events they cover. Simply saying “all harmful events” is not enough. From a legal perspective, Covid-19 has taught us that Force Majeure clauses ought to include “Global Pandemics” as one of its events. Surprisingly, the vast majority of Force Majeure clauses did not contain such a phrase before Covid-19. This led to some extremely frustrating scenarios because of how strict courts can be with these clauses.

Courts and Force Majeure Clauses.

Courts generally interpret Force Majeure clauses narrowly. This means that courts will read the words in the contract very literally. For example, if a Force Majeure clause says “Hurricanes,” damage from a tornado will not provide an excuse. Even if the concern was wind damage, and both hurricanes and tornados are capable of causing wind damage, a court will not interpret a Force Majeure clause liberally to include damage from a tornado. This means that if you want an effective Force Majeure clause, you need an attorney who is not only familiar with drafting contracts, but also capable of being creative. Courts interpret clauses this way to ensure that neither party can shirk their contractual duties or otherwise try to act dishonestly. Imagine if a Court interpreted “Hurricanes” as anything involving storms or water. Would it be fair to give a party an easy excuse out of a contract just because the property was a bit wet? Certainly not!

Can we cover for everything?

Since we know a Force Majeure clause must list all the events it covers with specificity, we absolutely cannot cover for every possible event. After all, even if we somehow knew of every event to write down, writing a clause that would take up thousands (or more) pages would be absurd. Additionally, as Covid-19 has taught us, sometimes we simply cannot see into the future. Even the most brilliant mind is bound to miss a potential scenario. After all, humans are not infallible. However, that does not stop us from learning from our experiences. Each time a new event occurs, we can add it to our long list of Force Majeure events. While people balked at being unable to excuse performance due to Covid-19, we now know to add “Global Pandemics” to our clauses.

Conclusion.

We always have something new to learn every day. Covid-19 has taught us valuable lessons even in the legal world. A good attorney is always a strong start, but you need to ensure you pick an attorney who is capable of being creative as well. The key to a strong Force Majeure clause is to cover as many events as you can think of, while also accounting for possible new events which could disrupt your contract.

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As with any legal issue, it is important that you obtain competent legal counsel before making any decisions about how to respond to a subpoena or whether to challenge one - even if you believe that compliance is not required. Because each situation is different, it may be impossible for this article to address all issues raised by every situation encountered in responding to a subpoena. The information below can give you guidance regarding some common issues related to subpoenas, but you should consult with an attorney before taking any actions (or refraining from acts) based on these suggestions. Separately, this post will focus on New Jersey law. If you receive a subpoena in a state other than New Jersey you should immediately seek the advice of an attorney in your state as certain rules differ in other states.