Most everyone in the construction business in Texas is familiar with “force majeure” clauses and includes them in their contracts. From hurricanes to flooding and more, Texas experiences a wide range of weather events that can be catastrophic. Any one of these “greater forces” can delay or disrupt a construction project.
Force majeure clauses are intended to limit the liability of businesses when unforeseeable circumstances prevent them from fulfilling the terms of the contract. These circumstances include not just acts of nature but things like sudden supply chain disruptions, terrorist attacks and other man-made events.
When is something really unforeseeable?
Typically, to invoke the force majeure clause in a contract, in addition to being unforeseeable, the event needs to be something beyond the control of the parties bound by the contract and serious enough to prevent a party from fulfilling the terms of the contract.
The “unforeseeable” part is where there’s often conflict and even litigation when the clause is invoked. For example, was a massive hurricane in the middle of hurricane season really unforeseeable? Of course, devastating hurricanes have become more frequent, and hurricane “season” is no longer as predictable as it once was.
Being prepared with alternate plans
Questions can also be raised about whether a shortage of materials or a labor strike could or should have been predicted or at least accounted for in the planning. That’s why having a Plan B or even a Plan C is wise. It’s typically in everyone’s best interest if a force majeure clause doesn’t need to be invoked. It should be a last resort.
Whether you’re developing a contract, negotiating one or you’re looking at potential litigation around your force majeure clause or other terms, it’s always smart to have experienced legal guidance.
Whether you’re crafting, negotiating, challenging or attempting to uphold a force majeure clause, it’s crucial to have experienced legal guidance.
