In this post last month, I offered my revised “force majeure” language, then revised it further as it was brutalized by readers. *sobs*
In case force majeure hasn’t outstayed its welcome among you all, I’d like to run an idea by you.
The language in the previous post begins as follows:
If a Force Majeure Event prevents a party from complying with any one or more obligations under this agreement, that inability to comply will not constitute breach if …
But it’s not only performance of obligations that could be impeded by a force majeure event. A party could also be impeded from exercising discretion (Acme may …) or from satisfying a condition (If Acme … , then …). I’ve incorporated this broader approach in the following version:
If a Force Majeure Event prevents a party from complying with one or more obligations under this agreement, exercising discretion under this agreement, or satisfying any conditions under this agreement, any time limits on that performance stated in this agreement will be suspended for the duration of that Force Majeure Event if …
What do you think? How would this play out in practice?
Ken:
If the delay excused party A’s condition, and the condition was to party B’s obligation, then you have to carefully create party B’s right to delay based on party A’s delay. While a day-for-day approach often works, if the performance is due by a date, or some days are different from others, then that approach won’t work. So, while this might work for many deals, it won’t for many others.
Chris
If party A hasn’t fulfilled the condition then, regardless of whether party A is excused through force majeure, surely party B’s obligation wouldn’t arise to begin with? (I think that would be the case for a standard force majeure, which excuses breach rather than deeming compliance – though it would be worth checking the wording to make sure.)
Westmorlandia:
You are thinking like a lawyer! The point was that the result you identify won’t meet the business need in most cases.
Example: In an IT consulting contract, many of the consultant’s tasks are dependent on the customer providing information by certain dates. If the customer is late, we presumably don’t want to excuse the consultant from performance at all. Rather, we want to excuse the consultant’s resulting delay. But the customer still wants to hold the consultant to something that it can measure, so just saying “resulting delay” doesn’t give the customer’s project manager a date on which he or she can start complaining with justification. So, a tailored delay clause would be better. (As an aside, we also don’t want to have the negotiate an amendment for routine delays.)
Chris
Candor forces me to admit that this is a few rungs up the ladder of abstraction for me. Could somebody give a couple of concrete examples using a hurricane or a boat sinking or, topically, a government shutdown? I’ll be over at chez force majeure.
When might a force majeure get-out be needed for a discretion? If it’s discretionary, how can there be a breach?
I’m also not sure about the idea that it seems to only applies to time limits. What if the obligation is to do something continuous, like provide overnight security, or staff an IT service desk? What if time is of the essence, like catering for a function (so that no one wants them to turn up 3 days later once the force majeure has ended)?
As a very minor point, I would change “one or more obligations” to “any obligation”. I simply can’t see that being interepreted as “any one and only one obligation”, though if anyone has a mad court case suggesting it could be, I’d be interested to see it. (You also say “any conditions” and “any time limits” later – I slightly prefer the singular.)
It’s not a matter of a party’s being relieved of breach. Instead, it’s a matter of a party’s being harmed by not being able to do something that it has discretion to do.
I’m mull over your other points.