Force Majeure: Contract Basics
As an independent contractor the challenge of writing up a contract that is complete, accurate and "water tight" is not easy. The inclusion of certain clauses in your contracts will reduce risks to your company from lawsuits or misunderstandings. Surprisingly, the subject matter of the provisions in a contract is important - the exact wording is not. So, as long as the "plain sense" meaning is the same, it's not critical to use the wording or strive to use "legal-ease" language. Here is a description of one term often used in contracts.
Force Majeure (sample contract language)
Neither party shall be held responsible for any delay or failure in performance of any part of the contract to the extent such delay or failure is caused by fire, flood, explosion, war, embargo, government requirement, civil or military authority, act of God, or other similar causes beyond its control and without the fault or negligence of the delayed or non-performing party. The affected party will notify the other party in writing with ten (10) days after the beginning of such cause that would affect its performance. Notwithstanding, if a party's performance is delayed for a period exceeding thirty (30) days from the date the other party receives notice under this paragraph, the non-affected party will have the right, without any liability to the other party, to terminate this contract.
What This Means
This means that if some unforseen event prevents you, or the other party(ies) in the contract from performing their part of the contract, the non-performance will not be considered a breach of contract. However, the party experiencing the event must inform the other party(ies) that its performance under the contract is delayed and if the delay lasts more than 30 days, the contract may be terminated by the other party. When you are using this language, list the catastrophic events that are applicable to your business. The notice period should be long enough to allow the affected company to provide the notice, and the time period giving way to terminating the contract should be fair to both parties.
Force Majeure (sample contract language)
Neither party shall be held responsible for any delay or failure in performance of any part of the contract to the extent such delay or failure is caused by fire, flood, explosion, war, embargo, government requirement, civil or military authority, act of God, or other similar causes beyond its control and without the fault or negligence of the delayed or non-performing party. The affected party will notify the other party in writing with ten (10) days after the beginning of such cause that would affect its performance. Notwithstanding, if a party's performance is delayed for a period exceeding thirty (30) days from the date the other party receives notice under this paragraph, the non-affected party will have the right, without any liability to the other party, to terminate this contract.
What This Means
This means that if some unforseen event prevents you, or the other party(ies) in the contract from performing their part of the contract, the non-performance will not be considered a breach of contract. However, the party experiencing the event must inform the other party(ies) that its performance under the contract is delayed and if the delay lasts more than 30 days, the contract may be terminated by the other party. When you are using this language, list the catastrophic events that are applicable to your business. The notice period should be long enough to allow the affected company to provide the notice, and the time period giving way to terminating the contract should be fair to both parties.
posted by Michele Webb at 8:03 PM
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