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What does a force majeure clause mean?

On Behalf of | Apr 20, 2023 | business litigation

Understanding any contract is important, but as a business owner, you need to pay particular close to every clause and its associated meaning. Force majeure is a common inclusion in contracts, but do you understand what it means and why it is there?

Get a bit of insight into what this crucial element of a contract means and what it might do for your business and you.

What does force majeure mean?

A force majeure is a factor that no one could anticipate and is beyond any one signatory’s control. This event or element must harm your business and the contracted services under the contract. For example, a natural disaster in another state might disrupt the logistical chain of receiving materials for your business. It may set back your ability to fulfill the contract, and therefore, qualify as a force majeure.

What does a force majeure do for your business contract?

Since a situation that falls into a force majeure category is something you did not anticipate, it can have devastating consequences for your business contract. It may render you unable to fulfill your end of the agreement, which may constitute a breach if you did not have a force majeure clause. This section allows any party who can prove its setback qualifies as a force majeure the out needed to remain protected from legal action for breach of contract.

Should you discover that a business contract does not contain a force majeure clause or that it is not specific enough, you may want to speak to someone about adding it. This one section can go a long way in keeping your business out of court.