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Force majeure: Difference between revisions
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[[Force majeure]] addresses unpredictable external contingencies that make practical performance of the contract ''impossible'' — catalogue of floods, hurricanes, trade winds and other amusing vicissitudes that are set out below. | [[Force majeure]] addresses unpredictable external contingencies that make practical performance of the contract ''impossible'' — catalogue of floods, hurricanes, trade winds and other amusing vicissitudes that are set out below. | ||
===[[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. | ||