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Force majeure: Difference between revisions
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[[ | {{image|Nemo|png|Aboard the Nautilus, yesterday}} | ||
}}{{d|Force majeure|/fɔːs mæʤɔː/|n|}} | |||
Something so beyond one’s control or expectation that the non-performance it occasions shouldn’t count as breach of contract ''at all'' — at least until you’ve had a chance to sort yourself out, fashion a canoe paddle with a Swiss Army knife, jury-rig an aerial out of an old coat hanger and get reconnected to the world wide web. | |||
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, Tunguskan explosions and other amusing vicissitudes — amusing ''to those preparing legal contracts'', that is, not those actually ''suffering'' them — 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. | |||
If you ever find “operation of the trade winds” in a force majeure clause, readers, let us know: that’s probably one of ours. | |||
===[[Force majeure]] vs. [[limited recourse]]=== | ===[[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 {{tag|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<ref>Okay, okay — if there is an earthquake the parade may be delayed. I get that. But imagine it wasn’t. Most analogies | 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 {{tag|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).<ref>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?</ref> | ||
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. | 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. | ||
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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: | 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: | ||
{{quote|{{ultimate force majeure}}}} | |||
Of course, if you want a sensible one, you can also go to our boilerplate repository and get our sample [[force majeure clause]] there but it is really boring. | |||
{{sa}} | {{sa}} | ||
*[[Force majeure clause]] | |||
*[[Limited recourse]] | *[[Limited recourse]] | ||
*[[Force Majeure Event - ISDA Provision]] | *[[Force Majeure Event - ISDA Provision]] | ||
{{c2|egg|Astrophysics}} | {{c2|egg|Astrophysics}} | ||
{{ref}} | {{ref}} | ||