Business can be unpredictable for a supplier, and unexpected events can sometimes disrupt your ability to fulfil contractual obligations. A force majeure clause can help to safeguard your business when unforeseen events occur. You may wonder if this clause is always needed, especially if your services or industry are low risk. This article explores the purpose of a force majeure clause and whether you need one in your contracts.<\/p>\n\n\n\n
A force majeure clause<\/a> relieves your business from contractual obligations when unexpected events occur. It typically limits liability if unforeseen events make it difficult or impossible to fulfil contractual duties.\u00a0<\/p>\n\n\n\n Depending on the wording of the clause<\/a>, it can excuse a party from performing their obligations, explain delays, allow an extension of time, or permit contract termination. <\/p>\n\n\n\n Common force majeure events include wars, natural disasters, pandemics, and other significant disruptions. If these events occur, they can significantly hinder a business’s ability to perform its obligations.<\/p>\n\n\n\n If you decide to include a force majeure clause<\/a>, you must ensure precise drafting to clearly define the events covered, the consequences, and notification requirements. Clear language in your clause will help ensure both parties understand the clause’s implications. Your business should also regularly review the clause to ensure it remains helpful and practical. As business environments and potential risks evolve, updating this clause can help ensure it provides adequate protection over time. <\/p>\n\n\n\n Sometimes, omitting a force majeure clause might make sense for your business. For short-term, low-value contracts with minimal risk, a force majeure clause<\/a> might seem unnecessary or not worth the cost of drafting and negotiating the clause. <\/p>\n\n\n\n Additionally, specific industries might not typically include such clauses, and you might omit the clause to streamline negotiations. However, omitting a force majeure clause does come with risks, as explored below. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nWhen Might You Omit a Force Majeure Clause?<\/h2>\n\n\n\n