Force Majeure

What Is Force Majeure?

Force majeure is a contract concept that excuses or suspends a party’s performance obligations when an extraordinary event beyond the party’s reasonable control prevents performance. The term is French in origin (literally “superior force”) and is fully recognised as a stand-alone judicial doctrine in civil-law jurisdictions. In US practice, force majeure is primarily a contract clause that parties negotiate, supplemented by the related common-law doctrines of impossibility, impracticability, and frustration of purpose, and by Uniform Commercial Code Section 2-615 for sale-of-goods contracts.

For US contractor agreements, master services agreements, and statements of work, the force-majeure clause is the part of the contract that sets out what happens when a pandemic, war, cyber-attack, or government order makes performance impossible or commercially impracticable.

The US Legal Framework

US law approaches force majeure through three interlocking sources.

The Contract Clause

Where the contract contains a force-majeure clause, the parties are bound by its terms. US courts read force-majeure clauses according to their negotiated text, and a well-drafted clause sets out the triggering events, the consequences, and the procedural requirements with precision. If the clause does not list a particular event, courts are generally reluctant to read it in by analogy, particularly outside ejusdem generis contexts.

Restatement (Second) of Contracts Sections 261-265

Where the contract is silent on force majeure, US courts turn to the common-law doctrines of impossibility, impracticability, and frustration of purpose. The Restatement (Second) of Contracts captures the modern formulation (https://www.law.cornell.edu/wex/impracticability). Section 261 discharges performance made impracticable without the party’s fault by the occurrence of an event the non-occurrence of which was a basic assumption of the contract. Section 262 treats death or incapacity of a person necessary for performance as such an event. Section 264 applies the same rule to governmental regulation or order. Section 265 discharges performance where the principal purpose of the contract is substantially frustrated. The Restatement uses “impracticable” rather than “impossible”. Performance need not be physically impossible to be discharged. It must be extreme and not within the risk the party assumed.

UCC 2-615 for Sale of Goods

For contracts for the sale of goods, the Uniform Commercial Code Section 2-615 codifies a similar rule. UCC 2-615(a) provides that delay in delivery or non-delivery in whole or in part by a seller is not a breach if performance as agreed has been made impracticable by the occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made, or by good-faith compliance with any applicable foreign or domestic governmental regulation or order whether or not it later proves to be invalid (https://www.law.cornell.edu/ucc/2/2-615).

UCC 2-615 imposes two procedural duties on a seller seeking to excuse performance:

• Subsection (b). Where partial performance is possible, the seller must allocate production and deliveries among customers fairly and reasonably.
• Subsection (c). The seller must seasonably notify the buyer of any delay or non-delivery and, where allocation is required, the estimated quota.

UCC 2-615 applies to contracts for the sale of goods (UCC Article 2) and does not apply to services contracts. Services contracts fall back to the Restatement common-law framework.

Common Triggering Events

A negotiated US force-majeure clause typically enumerates events such as acts of God and natural disasters (hurricane, earthquake, flood, wildfire), war and terrorism, government action (embargoes, sanctions, lockdowns, mandatory closures), pandemic and epidemic (now standard post-2020), labour strikes and shutdowns, supply-chain disruption, infrastructure failure, and cyber events such as ransomware. Standard exclusions are also explicit. Inability to pay through financial distress alone, market price movements, and risks that the affected party expressly assumed are typically carved out of the clause.

Notice and Mitigation Duties

Most negotiated US force-majeure clauses require the affected party to give written notice within a stated period (commonly 5 to 15 days of becoming aware of the event), describing the event, identifying the affected obligations, and estimating the expected duration.

The affected party also has a continuing duty to mitigate, meaning to take commercially reasonable steps to overcome or work around the event, to limit the scope of affected performance, and to resume performance promptly once the event ends. Under the common-law framework, even without an express clause, the affected party must seasonably notify the counterparty and, where partial performance is possible, allocate it fairly (mirroring the UCC 2-615 obligations).

Failure to give timely written notice and to document mitigation efforts is the most common reason courts deny force-majeure relief. A force-majeure event is not self-executing. The affected party must invoke it on the contract’s terms.

Force Majeure and US Contractor Agreements

For US contractor agreements, master services agreements, and statements of work, the force-majeure clause sets out how the contractor and the client share the risk of extraordinary events. Common drafting points for these contracts:

• The clause should cover services interruption (not just goods delivery), so cyber events, infrastructure failure, and pandemic-related disruption are properly enumerated.
• Notice and mitigation timelines should be realistic for a services context (work-from-anywhere contractor relationships can often continue through events that would shut down a physical-goods supply chain).
• Termination rights should be calibrated. A common approach is suspension during the event, with either party entitled to terminate if the event persists beyond a stated period (commonly 30 to 90 days).

See our entries on ESIGN and UETA for the related question of how the contract gets executed in the first place.

How Omnivoo Helps

Omnivoo Contract Management ships US contractor and MSA templates with a modern force-majeure clause that enumerates pandemic, cyber-attack, government action, and supply-chain disruption alongside the traditional acts-of-God list, with notice and mitigation timelines calibrated for services engagements. Clients can edit the template or substitute their own counsel-drafted clause, and the executed contract stays linked to the signing audit trail, so when a force-majeure notice is later given the contractually agreed clause is one click away.