As the novel coronavirus COVID-19 forces the shuttering of businesses and significant disruption to supply chains, companies are advised to take steps to ensure that they clearly understand the potential effects of any Force Majeure clauses that may be found in their key contracts
Force Majeure – English Law, French Word, Latin Principles
In recent weeks, fueled by the media, the term Force Majeure has become increasingly commonplace in the coverage of the COVID-19 crisis. What was, until recently, a relatively obscure concept only really of interest to contract lawyers has graduated to become a far more widely-referenced piece of legalese.
Unfortunately, as is often the case with legal constructs that are suddenly thrust into the spotlight, being ‘widely-referenced’ and being ‘clearly understood’ are two very different things.
The concept of Force Majeure derives from French Law and whilst it is generally taken to mean acts, events or circumstances beyond the reasonable control of the relevant party, the actual term Force Majeure has no direct or recognized meaning under English Law. As such, for it to be relied upon or enforceable as a concept in English Law-governed agreements it must be carefully defined. The Courts have consistently held that use of the term Force Majeure in a contract without a suitable definition (ie. “the usual Force Majeure clauses shall apply”) is unlikely to be found to be effectively construed.