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Force majeure: Difference between revisions
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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 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]]=== | ===[[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 don’t bear close examination, right?</ref> | 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. | ||