Revisiting My “Force Majeure” Language (With Yet More Changes)

[Updated January 18, 2014, to add to 12.4(b) “or other change in general economic conditions”.]

[Updated yet again August 24, 2013, to reflect further comments emailed me by A. Wright Burke.]

[Updated August 20, 2013, to reflect changes prompted by A. Wright Burke’s comment.]

[Updated July 31, 2013, to reflect the comment by “Uninterested Observer.”]

[Here’s the latest and greatest:

             12.4      Force Majeure. (a) 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 (1) that party uses reasonable efforts to perform those obligations, (2) that party’s inability to perform those obligations is not due to its failure to (A) take reasonable measures to protect itself against events or circumstances of the same type as that Force Majeure Event or (B) develop and maintain a reasonable contingency plan to respond to events or circumstances of the same type as that Force Majeure Event, and (3) that party complies with its obligations under section 12.4(c).

(b)         For purposes of this agreement, “Force Majeure Event” means, with respect to a party, any event or circumstance, whether or not foreseeable, that was not caused by that party [(other than a strike or other labor unrest that affects only that party, an increase in prices or other change in general economic conditions, a Change in Law, or an event or circumstance that results in that party’s not having sufficient funds to comply with an obligation to pay money)] and any consequences of that event or circumstance.

(c)         If a Force Majeure Event occurs, the noncomplying party shall promptly notify the other party of occurrence of that Force Majeure Event, its effect on performance, and how long the noncomplying party expects it to last. Thereafter the noncomplying party shall update that information as reasonably necessary. During a Force Majeure Event, the noncomplying party shall use reasonable efforts to limit damages to the other party and to resume its performance under this agreement.

In an initial fit of enthusiasm I consolidated subsections (a) and (b), but I was persuaded by Chris Lemens’s comment to reverse course. Then A. Wright Burke took over and politely but firmly prevailed upon me to eliminate all sorts of other crud. Here are the gory details:

  • I omitted from the beginning of subsection (a) the phrase “If a Force Majeure Event occurs” and changed the following reference to “that Force Majeure Event” to “a Force Majeure Event.”
  • I omitted from subsection (a) the carveout for an obligation to pay money. A similar carveout is included in the definition of “Force Majeure Event,” and that carveout addresses the issue more accurately. And having both carveouts would likely lead to confusion, even with my explanation that if you want to address the issue, you should include only one carveout.
  • In the first sentence I changed the passive voice to active voice.
  • I changed “performing” to “complying” (see MSCD 3.138). Follow your own guidelines, Adams!
  • I changed the concept of a party’s not being required to perform to “that failure to comply will not constitute breach.” That’s far more logical.
  • In clause (1) of subsection (a), I changed “used” to “uses.”
  • In clause (2), to avoid unnecessarily invoking causation, I changed “of the sort that gave rise to that Force Majeure Event” to “the same type as the Force Majeure Event.
  • I revised the definition of Force Majeure Event by adding at the end “and any consequences of that event or circumstance.” If a pipeline ruptures, the problem might not be the rupture but the weeks required to do repairs and cleanup.
  • I got rid of the defined term “Nonperforming Party,” using instead “that party” and “the noncomplying party.”
  • In subsection (c), I replaced “Upon occurrence of a Force Majeure Event” with “If a Force Majeure Event occurs.” Abstract nouns bad, verbs good!

But I don’t expect that this is the end of it!]

***

In this post and this post I offered, and noodled with, a force majeure provision. Here it is again, with a couple of tweaks:

             12.4      Force Majeure. (a) If a Force Majeure Event occurs, the party that is prevented by that Force Majeure Event from performing any one or more obligations under this agreement (the “Nonperforming Party”) will be excused from performing those obligations, on condition that (1) the Nonperforming Party used reasonable efforts to perform those obligations, (2) the Nonperforming Party’s inability to perform those obligations is not due to its failure to take reasonable measures to protect itself against the event or circumstance giving rise to the Force Majeure Event, and (3) the Nonperforming Party complies with its obligations under section 12.4(c).

(b)         For purposes of this agreement, “Force Majeure Event” means, with respect to a party, any event or circumstance, regardless of whether it was foreseeable, that was not caused by that party and that prevents a party from complying with any of its obligations under this agreement [(other than an obligation to pay money)] [(other than an event or circumstance that results in a party’s not having sufficient funds to comply with an obligation to pay money)], except that a Force Majeure Event will not include [a strike or other labor unrest that affects only one party, an increase in prices, or a Change in Law].

(c)         Upon occurrence of a Force Majeure Event, the Nonperforming Party shall promptly notify the other party of occurrence of that Force Majeure Event, its effect on performance, and how long that party expects it to last. Thereafter the Nonperforming Party shall update that information as reasonably necessary. During a Force Majeure Event, the Nonperforming Party shall use reasonable efforts to limit damages to the other party and to resume its performance under this agreement.

What’s different about this version? Only the following: The new clause (1) of subsection (a) contains what had been part of the definition of “Force Majeure,” in section (b). And in response to comments to my original posts, I added clause (2) to subsection (a). As previously, the bracketed language in section  (b) includes some possible carveouts.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.