Force majeure

From The Jolly Contrarian
Jump to navigation Jump to search
Negotiation Anatomy

Aboard the Nautilus, yesterday


Walk-away | Escalation | Algorithm | Heuristic | subject matter expert | Operationalisation | Playbook | Smart contract | Dead horse | Knife fight | 7 wastes | Cruddy legal advice

Index — Click ᐅ to expand:

Get in touch
Comments? Questions? Suggestions? Requests? Sign up for our newsletter? Questions? We’d love to hear from you.
BREAKING: Get the new weekly newsletter here Old editions here

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 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); 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; 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 (however Saxon, Norse, Gallic or Celtic in etymological nature) having menacing aspect (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, unusually shaped duck, leviathan 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; 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; 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, singularity, 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; any earthquake, volcano, avalanche, 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; 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; 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); any unjustified sedition, treason, espionage, political agitation or nefarious action of the Queen’s enemies unanticipated at the time of contract; 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; 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, a 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) and any other circumstances beyond its reasonable control which it could not reasonably have avoided and which prevents its reasonable performance of its obligations hereunder.

See also

Published on LinkedIn

References

  1. 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?