Force Majeure refers to a clause in contracts that frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents one or both of them from fulfilling the contract. These events include natural disasters, war, pandemics, and other unforeseeable incidents.
Legal Context:
In legal terms, a Force Majeure clause is included to allocate the risk of unexpected events. When such an event occurs, it may suspend or terminate the obligations under the contract without penalties. The clause must be specific about what constitutes a Force Majeure event, and its applicability is subject to interpretation by courts.
Example
For instance, if a company is contracted to deliver goods by a certain date but a hurricane disrupts transportation routes, the Force Majeure clause may relieve the company from liability for late delivery, as the event was beyond their control and directly impacted their ability to perform.
