Clause Guide

Force Majeure clause: meaning, risks, and what to negotiate

Excuses contractual performance when extraordinary events outside a party’s control occur.

What it means

Force majeure clauses determine what happens when unexpected, uncontrollable events disrupt a contract. These provisions became especially important during events like global pandemics, supply chain breakdowns, and geopolitical conflicts. Without clear and modern drafting, parties may remain legally obligated to perform—even when performance becomes impossible, illegal, or commercially impractical. A well-drafted clause protects both sides by allocating risk fairly during extreme disruption.

Common risks

11 risks identified

The clause may be too narrow and exclude real-world disruptions (e.g., pandemics, cyberattacks, supply chain failures).

Events may be listed exhaustively, meaning anything not listed is excluded.

The other party may be excused from performance while you are still required to perform (e.g., payment obligations continue).

No obligation on the affected party to mitigate or reduce the impact of the event.

No requirement to notify the other party promptly, leading to uncertainty.

No right to terminate if the disruption continues indefinitely.

Ambiguous language around what qualifies as 'beyond reasonable control'.

Economic hardship or increased costs may be excluded, even if severe.

Overly broad clauses may allow a party to avoid obligations too easily.

Timing gaps (e.g., delays vs full non-performance) may not be clearly addressed.

Different interpretations across jurisdictions (force majeure is treated differently depending on governing law).

What to check before signing

Checklist

What specific events are listed (e.g., natural disasters, pandemics, war, terrorism, government action)?

Is the list exhaustive or illustrative (does it include 'including but not limited to')?

Are modern risks included (e.g., cyber incidents, supply chain disruption, epidemics)?

Are both parties equally protected, or is the clause one-sided?

Do payment obligations pause during the force majeure event?

Is there a requirement to mitigate the effects of the disruption?

Is prompt notice required when a force majeure event occurs?

How long can performance be suspended before termination rights arise?

Is partial performance addressed (e.g., reduced service levels)?

Does the clause cover illegality (e.g., government bans) as well as impossibility?

Are there any carve-outs (e.g., failure to pay is not excused)?

Does the clause align with the governing law’s interpretation of force majeure?

Negotiation ideas

Actionable

Expand the definition to include modern risks (pandemics, cyber incidents, supply chain failures, government lockdowns).

Use 'including but not limited to' to avoid overly narrow interpretations.

Ensure mutuality so both parties are protected equally.

Include a clear obligation to mitigate the effects of the disruption.

Require prompt written notice of any force majeure event.

Pause payment obligations where services cannot be delivered.

Add a long-stop termination right (e.g., either party can terminate after 30–90 days of disruption).

Clarify that economic hardship alone is not sufficient unless explicitly agreed.

Define what happens during partial performance (e.g., reduced fees or pro-rata adjustments).

Ensure the clause covers both delay and complete non-performance.

Align the clause with real operational risks in your industry.

Example clause

Neither party shall be liable for any failure or delay in performing its obligations under this Agreement (other than payment obligations, unless otherwise agreed) if such failure or delay is due to events beyond its reasonable control, including but not limited to natural disasters, pandemics, war, terrorism, government actions, labor disputes, or supply chain disruptions. The affected party shall promptly notify the other party and use reasonable efforts to mitigate the effects of the event. If the force majeure event continues for more than sixty (60) days, either party may terminate this Agreement upon written notice.

Frequently asked questions

8 questions

Does force majeure cancel a contract?

Not automatically. It usually suspends obligations temporarily. If the disruption continues for a defined period, the contract may allow termination.

Are pandemics always covered?

Not necessarily. Older contracts often do not explicitly include pandemics, which led to disputes during COVID-19. Modern clauses should include them explicitly.

Does force majeure excuse payment obligations?

Often no—many clauses specifically exclude payment obligations unless negotiated otherwise. This is a key point to check.

What’s the difference between force majeure and hardship?

Force majeure typically requires impossibility or illegality, while hardship refers to performance becoming significantly more difficult or expensive, which is often not covered unless specified.

Does the affected party have to mitigate the impact?

In well-drafted clauses, yes. They are usually required to take reasonable steps to reduce the disruption.

Can force majeure be abused?

Yes. Broad or vague clauses can allow a party to claim force majeure too easily, which is why clear definitions and safeguards are important.

Is force majeure treated the same in all countries?

No. Some jurisdictions have statutory concepts of force majeure, while others rely entirely on contract wording.

What happens if force majeure isn’t included?

You may have to rely on general legal doctrines like frustration or impossibility, which are harder to prove and less predictable.

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