Commercial contracts are important documents that can help protect your business from risk. However, if you are a customer, you should be aware that a contract issued by a business supplier may be drafted to favour the supplier and include robust protections to help them. For instance, a supplier contract may contain a ‘force majeure clause’ that your business does not understand. Although these clauses may appear straightforward and acceptable, they can carry significant implications for your contract when unforeseen events arise. If your supplier includes this provision, it is crucial to assess its specific wording, understand its impact, and evaluate how it may affect your contract. This article explores the purpose and potential implications of force majeure clauses for your business to understand, especially when the clause comes up in your supplier’s contracts.<\/p>\n\n\n\n
A commercial contract is a key legal document<\/a> that helps protect your business from risk by setting out the terms of your business relationship or project with a third party. It typically outlines what each party must do, explains any payment and delivery obligations, and provides a process for resolving disputes and enforcing contractual rights. <\/p>\n\n\n\n Without a clear contract, your business risks unnecessary risks and uncertainty. A clause outlines how the contract handles disruptions caused by unforeseen events, ensuring clarity when issues arise.<\/p>\n\n\n\n Force majeure typically refers to certain defined acts, events, or circumstances beyond the parties’ parties’ control (e.g., natural disasters or government restrictions). This clause typically allows one or both parties to adjust their contractual obligations when such events occur. The idea behind these clauses is that if uncontrollable events arise, the affected party should be relieved from (or permitted to suspend) fulfilling some or all of their obligations. <\/p>\n\n\n\n The clause determines whether the agreement will continue, be suspended, or be terminated following an event beyond the affected party’s reasonable control. Both parties must agree on what qualifies as a force majeure event and clearly define its consequences in the contract, as English law does not automatically imply or define force majeure.<\/p>\n\n\n\n These clauses can give suppliers critical relief from contractual risks by suspending or excusing obligations during the event. To avoid issues such as unfair delays, you should ensure the clause is balanced and precise. Clear drafting ensures both parties can manage risks effectively during a disruption.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nHow Does a Force Majeure Clause Impact Your Business?<\/h2>\n\n\n\n