Force majeure
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Negotiation Anatomy™
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Force majeure
/fɔːs mæʤɔː/ (n.)
A magic incantation designed to keep those unpredictable contingencies that the natural world tends to throw at us at bay, allowing us relief from literal obligations as long as they make performance of the contract impossible.
Force majeure clauses used to catalogue of a horrendous litany floods, hurricanes, trade winds and other amusing vicissitudes, but modern approach is far more utilitarian and, frankly, less fun. We at the JC repeatedly call for a return to the good old days, as you will see from our recommended force majeure clause below. Occasionally we sneak it, or at least bits of it, into real contracts. If this meagre contribution to the health of the international capital markets, is the JC’s only legacy, he will die a happy man. He’s easily pleased about that sort of thing.
Force majeure vs. limited recourse
Note well: the concession force majeure offers is time bound: eventually, you must get up, dust yourself off and get on with the business of performing your contract. You can’t blame your delinquency on Cyclone Rudolph for ever — unless the obligation suspended itself were time-bound, and has no value by the time the disaster conditions have lifted. (If I have rented my room overlooking the Lord Mayor’s Parade for the day to a fellow who wants to watch it, an earthquake that demolishes my room the night before the parade is going to be pretty conclusive).[1]
So if, for example, the force majeure event is the catastrophic failure of your hedge counterparty to deliver you securities you had on-sold to a client, a force majeure in your client contract might excuse you from performance on the day, but only for so long as it took you to find another source of the securities in question. To absolve you absolutely from your obligation to your client, you would need something stronger: a limitation of recourse. Something like that.
That is to say, a force majeure delays the inevitable; it does not extinguish it.
General concepts
A force majeure is what was once called an Act of God. In these heathen days, contracting folk are sanguine and insert dull generalities (such workmanlike prose as “an event outside a party's control which it could not reasonably have avoided and by dint of which the contract is impossible to perform”), but there was a time — a better, gentler, happier time — in which force majeure was a lawyer’s one chance to really stretch his literary wings. The Jolly Contrarian went quite mad with it:
No party will be liable for losses arising from its non-performance due to any event beyond its reasonable control that it could not reasonably have avoided and that prevents its reasonable performance of its obligations hereunder including (without limitation):
- Supernature & the occult: Acts of God (monotheistic or polytheistic, including actions of prophets, seers, spirits, shamen, demigods and those claiming supernatural powers as a result of illegitimate divine involvement in their procreation including in each case their earthly or heavenly instruments of torment, temptation and/or confusion whether real, virtual, animate, inanimate, automatic, alive, dead, undead or having any other intermediate or indeterminate state of expiry, which such instruments shall include, and be deemed to include (but shall not be limited to or deemed to be limited to), any and all angels, devils, dæmons, cherubim, seraphim, incubi, succubi, chimæræ, banshees, basilisks, boggarts, bunyips, drop-bears, færies, phoenices, sprites, sphinxes, harpies, nymphs (aqueous or otherwise), dryads, elves, imps, ogres, genies, gargoyles, gnomes, gremlins, golems, gorgons, goblins, hobgoblins, titans, tricksters, ferrymen, trolls (whether mythical or internet-based), satyrs, fauns, centaurs, sirens, mermaids, mermen, merpersons and any other being prefixed with mer~ and having legal personality (including without limitation mercorporations) and regardless of gender age or sense of perspective, griffins, dragons of any type, kind or variety, minotaurs, unicorns, leprechauns, wild men, first men, last men, green men or bogey-men (in each case regardless of age, gender or decrepitude), valkyries, vampires, werewolves, hellhounds, will ’o’ the wisps, wraiths, witches, warlocks, wizards, white-walkers, bigfeet, yeti, or snowmen (howsoever abominable);
- Skynet, singularity etc: the malign, tiresome or inadvertently irritating interference of any form, database, network, distributed ledger or other technology however intelligent (whether naturally, artificially or generally artificially intelligent and/or stupid) including any file, document, template, macro, mail-merge, form field, snippet, cascading style-sheet, dialog box, chatbot, terminator (past, present or future), highlander (mortal or immortal), Turing or other learning or symbol-processing machine, robot vacuum-cleaner and/or lawnmower (whether or not LIDAR equipped), zero-day vulnerability, natural language processing, unnatural language processing, language bullying, language torture, language extraordinary rendition, neural network, self-administering electronic contract (however smart, dull, hackable, virus-laden, annoying or plodding and unimaginative in nature), any autonomous organisation (whether centralised or decentralised), any crypto-currency, crypto-token, crypto-security or other crypto-asset (fungible or non-fungible and however trustless or intermediated in nature), any stablecoin, unstablecoin, unity settlement coin, or other achingly fashionable web3 initiative notwithstanding the presence or (frankly far more likely) abject lack of any demonstrable point, reason, justification, need for it or other business or social use-case, however economically plausible;
- Metereology: any hurricane, cyclone, tempest, storm, shower, intermittent drizzle or other meteorological phenomenon; the operation or failure to operate when expected of any jet stream, trade wind, doldrum, el Niño, la Niña, Artic Dipole, Atlantic Multidecadal Oscillation or other recognised wind or weather pattern;
- Hydration: any deluge, flood, leak, dousing, unreasonable dampness or other unexpected aqueous invasion (whether or not having, or intended by supernatural power to have, remedial or punitive effect); any peril, danger, accident or vicissitude occurring on, in, under, above or courtesy of any ocean, sea, inlet, fjord, estuary, inland lake, lagoon, lido, pond, puddle, river, stream, brook, concourse, storm-water drain, firth, burn, loch, lochán, or other body of water having menacing aspect (however Roman, Saxon, Norse, Goth, Visigoth, Gallic Celtic or Iberian in etymological nature and whether fresh, brackish or saline) including for the avoidance of the doubt the unanticipated contents therein and thereof, whether in existence, plausibly hypothesised, suspected or plainly the product of public delusion or paranoid fantasy and whether by nature a reptile, lizard, giant squid, kraken, leviathan, mollusc, unusually shaped duck or other appalling creature of the deep howsoever described or such flotsam, jetsam, fly-tipped car tyres or other unidentified debris which may for the time being be reasonably mistaken for one or more of the foregoing;
- Lack of hydration: Any drought, dry spell, aridity, desiccation, chafing or analogous meteorological circumstance provided that it shall have occasioned a hosepipe restriction, mandatory measure for the conservation of water or animated debate on a nationally-recognised medium for the public discussion of current affairs;
- Astronomy: any eclipse (full or partial), nova, solar flare, electromagnetic pulse, comet, satellite, meteorite, space-borne magnetic anomaly, unidentified flying object, heat ray or other contraption of extra-terrestrial origin having nefarious effect, whether or not recognisably intelligent; any pronounced effect of gravity, any black hole, discontinuity, warping of space-time or other real or apparent violation of the settled laws of physics, or event requiring their revision or alteration thereto, and whether or not arising as a the intended effect of a successful experiment with a particle beam accelerator, collider, agitator or otherwise;
- Seismology and natural disaster: any earthquake, volcano, avalanche, land-slide, mud-slide, water-slide, hydro-slide, back-slide, blizzard, snowdrift, snowfall (where not anticipated) lack of snowfall (where anticipated) or material interruption to any seasonal recreational activity; any fire, conflagration, explosion, detonation, rust, reaction or other chemical process analogous to undesired oxidisation;
- War: any war (hot or cold), battle (on, above or under the land or sea or occurring otherwise in any frame of reference, geometry or part of the space-time continuum howsoever described, and regardless of howsoever far, far away), siege, invasion, entrenchment, withdrawal, strategic retreat, tactical retreat, surrender, outright capitulation, evacuation (whether or not assisted by civilians) or other flight from conflict;
- Civil unrest: any uprising, riot, looting, organised disobedience or other civil commotion (not including ironic “flash-mob” performances of songs from The Sound of Music and equivalent productions, however tiresome or poorly organised);
- Treason: any sedition, treason, espionage, agitation or other hostile action by or on behalf of an enemy of such King, Queen, Prince, Princess, Consort or Regent (in each case crowned or otherwise); Caesar, Kaiser, Tsar, Czar, Sultan, Emir, Caliph, Khan, Emperor, President, Chairman, Chief, General Secretary, Lord Protector, Great Leader, Dear Leader, Akond, Khaleesi or other monarch, ruler, titular head of state or representative of a deity (or deities) on Earth as may from time to time enjoy, have, be in, claim or, by conduct, assert authority and, in each case, however honourable, well-meant, nefarious or deserving of such seditionary action such person may be and regardless of how reasonably foreseeable at the time of contract such seditionary action was;
- End of days: Any Armageddon, Ragnarok, Götterdammerung, Götzendammerung, apocalypse (now, then or later, whether or not involving zombies and including horsemen, chess and/or Travel Scrabble™-playing reapers (regardless of how grim in aspect), plagues, lambs laying down with lions (on or off Broadway), leopards, cheetahs, panthas, pumas, fatted calves, real estate agents or other ghastly succubi of the night and such other signs, seals or symbols thereof as may have been foretold in scripture, apocrypha, other generally accepted religious texts (howsoever canonical), or in extended universe or fan fiction), abyss, cataclysm, quickening, rapture, revelation, world’s end, great day of judgment (which shall include summary judgment and such other similarly final or existentially crushing ex parte order as shall be made or deemed to be made by or on behalf of such deities as have or allege competent jurisdiction over the souls of the relevantly afflicted), end of days, omega, singularity, showdown between the forces of good and evil, gnab-gib, cosmic- or global-scale tragedy, catastrophe, devastation, threnody, vicissitude, misfortune or setback including such ultimate resting entropic state of the universe as may finally occur;
- Flora: The untoward effects of any tree, bush, hedge, plant, weed, knotweed, hardy perennial, creeper, ivy (whether or not poisonous) flower or other vegetation including its root system, root, branch, twig, tendril, leaf, spore, seed, fruit, nut or other part thereof, such untoward effects rendered by encroachment, growth, death, decay, harvest, invasion, desertion, felling, shedding, shading, failing to shade, which causes the unscheduled condemnation, subsidence, collapse or quaint but uninsurable wonkiness in or of contiguous or nearby structures;
- Fauna: the unwanted ministrations of any animal, whether naturally domesticated (mansuetae naturae) or wild (ferae naturae), the infestation of any insect, bird, fish, microbe or algal organism;
- Funga, etc: injuries, irritations, allergies, infections, reactions, overreactions, intoxications, hallucinations and similar neurological aberrations and other unwanted implications of yeasts, moulds, truffles, mushrooms, puffballs, spores, eukaryotes and other fungi, bacteria or virus of any type, kind or variety whether, aquatic, atmospheric or terrestrial, including for the avoidance of doubt jock itch, thrush, dandruff, ringworm, chlamydia, herpes and athlete’s foot;
- Personal injury by accident: any injury, illness or childhood infection encountered during pretend military fitness training, on an assault course or in a plastic ball pool, Jungle Jim™, Clown Town™ or other children’s play area however dismal; and
- Illness, physical or psychiatric: any significant case of sneezing, hiccups, dissentry, flatulence or gout; any endemic epidemic, pandemic or pingdemic; any obsessive compulsive disorder, obsessive compulsive disorder, obsessive compulsive disorder, obsessive compulsive disorder, obsessive compulsive disorder, attention deficit d, midlife crisis, paranoia, pedantry, frustration, irritation, cynicism or general scepticism about the state of the modern world and be assured God does know that’s understandable the way things are presently going, any poor judgment with any member of any sex (whether or not opposite and notwithstanding any past, present of future transition between).
See also
- Limited recourse
- Force Majeure Event - ISDA Provision
- Force Majeure - GTMA Provision
- Force Majeure - EFET Provision
References
- ↑ Okay, okay — if there is an earthquake the parade may be delayed. I get that. But imagine it wasn’t. Most analogies don’t bear close examination, right?