If you own a construction business here in Alabama, you know that even the most carefully planned projects can be disrupted by serious weather events like hurricanes and other storms and the flooding that often follows. As a result, you may already know that a force majeure clause in your contracts can help reduce your liability and other costs if a superior force (the translation of force majeure) intervenes.
It’s important to understand, however, that a force majeure clause can and should cover more than weather events and other acts of God or nature. It can also be used to cover any circumstances that you couldn’t have reasonably foreseen that interfere with the timeline of the project or even cause it to be scrapped entirely.
Relevant circumstances could include a materials shortage, supply chain issue, labor strike or even a terrorist attack, outbreak of war or public health crisis. Remember, however, that if you try to invoke your force majeure clause for something that the other party to the contract can argue should have foreseen and made contingency plans to handle, you may not escape liability for any additional costs incurred. The same can be true for things like flooding, sinkholes and other occurrences if the area in which you’re building is prone to these risks.
Crafting a force majeure clause
There’s no one-size-fits-all force majeure clause. You’ll need it to be specific about factors like under what conditions it would become effective, who would be notified and when/if the clause is invoked, what your continuing obligations to the project would be. Of course, the other party will have their own ideas and need to protect their interests. Like other parts of the contract, it may need to be negotiated.
By seeking experienced legal guidance, you can draft and negotiate a contract that protects your interests and that the other party agrees is fair. Legal guidance is also crucial if you find yourself, despite your best efforts, facing litigation or having to take legal action against someone due to a contract dispute.