Reed Smith Client Alerts

By definition, Force Majeure is usually unexpected and sudden. Are you ready? Do you know what to do and when? Was sufficient consideration given to Force Majeure when the relevant sale contracts were made? This alert looks at issues relating to Force Majeure before, during and after the event in the context of sale contracts.

Authors: Diane Galloway Vassia Payiataki

Before/when you make the contract

  • There are sale contracts with no Force Majeure clause. However, ‘frustration’ at English common law is a poor and inadequate substitute, so all sale contracts should logically have a Force Majeure clause.
  • Is there any standard ‘house’ Force Majeure clause that you use or certain issues you will always try to include? Examples could be:
    • Flexible notice provisions rather than set number of days
    • A ‘trigger’ for notice based on knowledge of the Force Majeure event rather than the event itself
    • A sweep up provision: “any other cause beyond the party’s control”
    • A clear end-point where the Force Majeure terminates the whole contract or part of it in case of an instalment contract